What does greenshoe mean?
Definitions for greenshoe
green·shoe
This dictionary definitions page includes all the possible meanings, example usage and translations of the word greenshoe.
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Wikipedia
Greenshoe
Formally known as an "over-allotment option", a greenshoe is the term commonly used to describe a special arrangement in a 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. The option 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 term is derived from the name of the first company, Green Shoe Manufacturing (now called Stride Rite Corporation), to permit underwriters to use this practice in an IPO.The use of greenshoe options in share offerings is now widespread, for two reasons: it is a legal mechanism for an underwriter to stabilize the price of new shares, which reduces the risk of their trading below the offer price in the immediate aftermath of an offer - an outcome damaging to the commercial reputation of both issuer and underwriter. Secondly, it grants the underwriters some flexibility in setting the final size of the offer based on post-offer demand for the shares.
Numerology
Chaldean Numerology
The numerical value of greenshoe in Chaldean Numerology is: 4
Pythagorean Numerology
The numerical value of greenshoe in Pythagorean Numerology is: 6
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"greenshoe." Definitions.net. STANDS4 LLC, 2024. Web. 27 Apr. 2024. <https://www.definitions.net/definition/greenshoe>.
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