Oversubscribed issue

Definition:

Investors are not able to buy all the shares or bonds they want, so underwriters must allocate the shares or bonds among investors. This occurs when a new issue is underpriced or in great demand because of growth prospects.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

High-premium convertible debenture

A bond with a long-term, high-premium, common stock conversion feature. It also offers a competitive interest rate. This type of investment vehicle is aimed at bond investors who want to be able to... Read More

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