Re: GreenShoe Option
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Message: GreenShoe Option
Greenshoe option:The agents may overallot the shares in connection with this offering and the company has granted to the agent, an option to purchase additional shares, up to 15 per cent of the offering, at $4.00 gross, up to the close of business Sept. 3, 2010.
Came across this as well. Makes you feel nice and warm on the inside knowing they can sell us down on a whim( even more so) up to Sept 3.
What Does Greenshoe Option Mean?
A provision contained in an underwriting agreement that gives the underwriter the right to sell investors more shares than originally planned by the issuer. This would normally be done if the demand for a security issue proves higher than expected. Legally referred to as an over-allotment option.
A greenshoe option can provide additional price stability to a security issue because the underwriter has the ability to increase supply and smooth out price fluctuations if demand surges.
A provision contained in an underwriting agreement that gives the underwriter the right to sell investors more shares than originally planned by the issuer. This would normally be done if the demand for a security issue proves higher than expected. Legally referred to as an over-allotment option.
A greenshoe option can provide additional price stability to a security issue because the underwriter has the ability to increase supply and smooth out price fluctuations if demand surges.
http://www.investopedia.com/terms/g/greenshoe.asp
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