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Related to oversubscribed: undersubscribed


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.


1. Or, relating to, or being a new security issue for which there are more requests to purchase securities than are securities available for sale. For example, brokers may take a sufficient number of preliminary orders for a new issue of stock for which there are insufficient shares available to satisfy the demand. Also called overbooked.
2. Of, relating to, or being a buyback or takeover attempt in which more securities are offered than the purchaser has agreed to buy. In such a case the purchaser may decide to buy the additional securities or may buy the agreed-upon number on a pro rata basis.


An initial public offering (IPO) is oversubscribed when investor demand for the shares is greater than the number of shares being issued.

What typically happens is that the share price climbs, sometimes dramatically, as trading begins in the secondary market, though the price may drop back closer to the offering price after a period of active trading.

The group of investment banks, known as a syndicate, that underwrites a hot IPO may have an agreement, known as a green shoe clause, with the issuing company to sell additional shares at the same offering price.

References in periodicals archive ?
The property developer said the order book was over 30 times oversubscribed for the institutional tranche and over 20 times for the individual tranche at the top of the price range.
This is definitely the way forward for oversubscribed stallions.
When schools are oversubscribed the local education authority applies criteria to decide which applications are successful including the distance a child lives from the school, the child's religious standing and whether or not the child has a brother or sister at the school.
Last week's auction was also in high demand, again nearly three times oversubscribed, despite the Bank doubling the weekly funding available to pounds 10.
Rate limiting therefore protects the network from being oversubscribed when storage traffic is introduced.
SEPI, a Spanish state holding company, has announced that the IPO for Iberia, the Spanish carrier, had been three times oversubscribed after a rush of last minute orders.
The public tranche of Chinese PC and parts manufacturer Great Wall Technology Co's initial public offering has been oversubscribed by 97 times, according to underwriter Salomon Smith Barney Hong Kong Ltd.
The program was still oversubscribed by more than another 550 megawatts, and those customers have been promised first dibs in Phase II, which will release another 1,000 megawatts.
Oversubscribed Financing Round to Accelerate Go-to-Market Timeline and Next Generation Product Development
Cyprus sold e1/450 mln of 26-week treasury bills during its auction on Thursday, which was oversubscribed by almost three times, pushing the yield down to an average 2.
Celestin Rwabukumba, Coordinator of the RSE expects the bond to be oversubscribed.
The institutional demand for the share was pretty high as the institutional segment of the issue was oversubscribed by many times, which clearly shows a pent-up demand for the shares.