Oversubscribed issue

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.
References in periodicals archive ?
In cases where the allottees are selected by lottery, it could even be that you get no shares in a heavily oversubscribed issue.
We appreciate the support and confidence of the underwriters and investors of this oversubscribed issue," said Phil Mulacek, CEO of InterOil.
The oversubscribed issue quickly closed and the shares will start trading tomorrow to give the 4,250 leased and tenanted pubs group a market capitalisation of around pounds 570 million.