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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 ?
We know overbooking has a bad reputation,' De Juniac acknowledged, while adding that the industry has since evolved and has grown more sophisticated.
SOBRE(R)RESERVA is a term that is not registered in the general or specialized dictionaries, but it is confirmed by its use in the texts: "El overbooking o SOBRERESERVA tiene lugar cuando se confirma una plaza al pasajero implicando que el numero total de reservas efectuadas para ese vuelo sobrepasa la cifra que corresponde a la capacidad real del avion" (Mapelli Lopez 1991: 475).
Overbooking applies only to cases where a passenger has not yet checked in.
Questioned more specifically on the issue of overbooking, the commissioner indicated that the audit will provide a much more comprehensive understanding of this phenomenon.
Easyjet chief executive Ray Webster said: ``What started as a good piece of legislation, to prevent traditional airlines bumping off passengers through overbooking, has become a bad piece of legislation and will cause unnecessary confusion and conflict.
We want to stop the practice of overbooking and cancelling flights for purely commercial reasons and make airlines more responsive to the needs of their clients.
It's one thing for a flight to be cancelled due to weather or technical reasons, but the policy of overbooking is a disgrace.
According to the terms of the US$1m (677,000 [pounds sterling]) agreement, Sabre will develop an advanced origin and destination (O&D) revenue management solution for Lufthansa Cargo, covering overbooking control, bid price optimisation and automated queue handling.
and Nicole Wise, parents who work ceaselessly to assure their children's success may be overscheduling, overbooking or overstimulating them.
All Nippon Airways (ANA) will begin on June 1 paying up to 20,000 yen per head in compensation to those passengers who agree to take different flights due to overbooking on domestic routes, the company said Wednesday.
Along with the overbooking and canceled flights, flyers with MS have to factor in anxious bladders, fatigue, and possibly mobility problems.