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Overallotment Option

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Greenshoe Option
A provision in some underwriting contracts allowing the underwriter to sell more shares to investors than were originally agreed. In an underwriting agreement, the underwriter agrees with the issuer of a security to place a certain amount with investors. If demand for the security exceeds the underwriter's supply, the greenshoe option allows the underwriter to avoid a sudden jump in price by increasing supply. Normally, the greenshoe option allows the underwriter to increase supply up to 15%. It is important to note that not all underwriting contracts have greenshoe options, especially in situations in which the issue is for a limited project for which the issuer only needs a certain amount of capital. It is also called an overallotment option.

overallotment option
See greenshoe.


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said its underwriters exercised their overallotment option to buy an additional 4.
3 million shares of trust preferred securities to be issued by its wholly owned subsidiary, First Busey Capital Trust I, including 300,000 trust preferred securities is suable pursuant to an overallotment option granted to the underwriters.
NAI") announced today that it agreed to sell, in concurrent underwritten offerings, 26,040,909 shares (plus an additional 2,604,091 shares if the underwriters exercise their overallotment option in full) of CBS class B common stock owned by NAI at a price to the public of $12.
 
 
 
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