Greenshoe
Contractual clause allowing the underwriter to buy shares of a registered stock offering
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Forgent Power Solutions (1) · IPO (1) · Over-allotment option (1) · Underwriters (1) · Greenshoe (1) · Capital markets (1) · Investment banking (1)
📖 Key Information
Greenshoe, or over-allotment clause, is the term commonly used to describe a special arrangement in a U.S. registered share offering, for example an initial public offering (IPO), which enables the investment bank representing the underwriters to support the share price after the offering without putting their own capital at risk. This clause is codified as a provision in the underwriting agreement between the leading underwriter, the lead manager, and the issuer (in the case of primary shares) or vendor (secondary shares). The provision allows the underwriter to purchase up to 15% in additional company shares at the offering share price.
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People and organizations frequently mentioned alongside Greenshoe:
- 🌐 Capital market (1 shared articles)
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- 🏢 Initial public offering (1 shared articles)