WHAT IS GREEN SHOE OPTION?



WHAT IS GREEN SHOE OPTION?..

Answer / naman

The greenshoe option is a clause in the underwriting
agreement of an IPO, which allows to sell additional shares,
usually 15%, to the public if the demand exceeds
expectations and the stock trades above its offering price.

This option, also known as the over-allotment provision. It
gets its name from the Green Shoe company, which was the
first company to allow such an option.

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