Chapter 2 of 8
What does "10 times subscribed" mean?
IPO Label · · About 1 minute to read
It means ten people asked for every one share the company had to give.
Think of a school trip with 10 seats. If 100 children put their name down, the trip is ten times full.
An IPO works the same way. The company decides how many shares it will hand out. People then say how many they want.
If people ask for ten times as many shares as there are, we say the IPO is 10 times subscribed.
- Shares the company had to give
- Shares people asked for
New word
Subscribed
How many times over people asked for the shares on offer. Two times means twice as many asks as shares.
When more people want shares than there are shares, not everyone can get some. Names are then picked in a draw.
Remember
A big number is not a promise. It only says how many people asked. It does not say what the share will be worth.