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Oversubscribed Issue

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Oversubscribed issue
Investors are not able to buy all the shares or bonds they want, so underwriters must allocate the shares or bonds among investors. This occurs when a new issue is underpriced or in great demand because of growth prospects.

Oversubscription
A situation in which investors show so much interest in a new issue of a security that demand exceeds supply. Before a new issue, underwriters canvass potential investors, who may or may not book an order to buy a portion the new issue. If investors order more shares than there are shares being issued, the security is said to be oversubscribed. This may affect the price when the security is actually issued.


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During Q4 2006 the company successfully placed 15 million shares at market price in a heavily oversubscribed issue to raise additional funds of [euro]22.
The oversubscribed issue closed on October 3, 1996.
 
 
 
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