The explanation for greenshoe option has been taken from investopedia.
Greenshoe option gives the underwriter an option to increase the allotment of shares.
In case the issuer feels there is a need for more capital or even to stabilize the price of the security it may be decided to over-allot the securities.This could also be done in case the demand for the security increases far more than expected.
Greenshoe option may allow the underwriter to issue 15% more shares than the original decided number
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