The underwriting agreement for an IPO may include this clause which stipulates that the issuer will sell additional shares if there is exceptionally high public demand.
An amount of shares that is reserved for issuing at the original price at the underwriter's option. This is used by the underwriter mainain an orderly market after listing.
a financial mechanism for stabilising share prices if there is volatility
Part of the underwriting agreement which allows, in the event the offering is oversubscribed, the issuer to authorize additional shares (typically 15 percent) to be distributed by the syndicate Also called the overallotment option.
Part of the underwriting agreement which allows the underwriters to buy up to an additional 15% of shares at the offering price for a period of several weeks after the offering.
The manager of a new issue of securities is usually given an over-allotment provision, allowing it, at its discretion, to increase the size of the issue. Named after the Green Shoe Co., the first corporation to grant its underwriters such a facility.
The underwriter's over-allotment allocation in a securities offering which gives an underwriter the right (but not the obligation) to purchase additional stock in connection with a public offering. The theoretical purpose of this standard over-allotment allocation is to permit the underwriter to stabilize the after-market for the companies' securities during the period immediately following a public offering. It is typically an additional 15 percent of the agreed-upon underwriting amount.
Refers to an underwriting allotment which is in excess of the the first stipulated share amount. Depending on demand and/or market stabilizing functions, an underwriter can exercise this option for additional shares. Many new deals now have this option included. Usually, the green shoe is limited to an additional 15 percent of new shares. It was named after the company for which it was the focus of the deal.
A portion of the underwriting agreement that says if the IPO is extremely popular then the issuer will authorize additional shares for distribution. Refers to the Green Shoe Co., later to become Stride Rite.
An underwriting agreement provision stipulating that, in the case of huge public demand, additional shares will be authorized by the issuer for distribution by the syndicate. See: Underwrite
A typical underwriting agreement allows the underwriters to buy up to an additional 15% of shares at the offering price for a period of several weeks after the offering. This option is also called the overallotment and is exercised when the IPO is oversubscribed and trading above its offer price. The ability to buy additional shares also allows the underwriter to manage the aftermarket trading. The term comes from the Green Shoe Company, which was the first to have this option.
This is an option for the underwriters to acquire from the company and resell up to an additional 15% of the firm commitment stock to cover over-allotments to customers of the firm commitment stock. The option allows the underwriters to obtain some additional stock at the same price as they purchased the firm commitment stock in order to cover excess orders in a rising market immediately following the offering.
A provision in an underwriting agreement that if there is an exceptional public demand, an issuer will authorise additional shares for distribution by the syndicate.
A disclosed provision (first used in the public offering of the Green Shoe Manufacturing Company) that underwriters may purchase additional shares from an issuer to meet the demands of an oversubscribed offering.