Overallotment

Overallotment

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.
References in periodicals archive ?
M2 EQUITYBITES-May 9, 2017-Eagle Point Credit announces exercise of overallotment option in stock offering
BANKING AND CREDIT NEWS-May 9, 2017-Eagle Point Credit announces exercise of overallotment option in stock offering
64% of the H shares in issue upon the completion of the global offering (prior to exercise of the overallotment option) and 2.
In addition, RBS will grant the underwriters an overallotment option to purchase up to an additional 11.
38 billion, including the overallotment option or the additional shares that the stabilizing agent can take up in case of strong demand.
NASDAQ: MITK) said that the underwriter of its previously announced public offering of common stock has exercised in full its overallotment option to purchase an additional 428,571 shares of common stock at the public offering price of USD5.
TELECOMWORLDWIRE-July 5, 2013-Mitek underwriters exercise overallotment option(C)1994-2013 M2 COMMUNICATIONS http://www.
After underwriting discount and estimated offering expenses the company expects to receive net proceeds of approximately USD11,600,000, assuming no exercise of the overallotment option.
3 million existing shares, including an overallotment option of a maximum 13.
N) underwriters exercised their full overallotment option, making the initial public offering of the U.
3% interest in Copa once the share sale is completed, or a 10% interest if the overallotment option is exercised in full.
TravelCenters of America LLC (NYSE MKT: TA) today announced that the underwriters of its public offering have exercised a portion of their overallotment option to purchase an additional $10 million of 8.