Allotment

What is an 'Allotment'

An allotment is the number of shares granted to each participating underwriting firm that they are permitted to sell during an IPO. Remaining surpluses are then given to other firms which have won the bid for the right to sell the IPO.

BREAKING DOWN 'Allotment'

This is the chunk each firm gets to sell to its customers before the stock hits the exchanges.

RELATED TERMS
  1. Stabilizing Bid

    A practice used by underwriters to stabilize the secondary market ...
  2. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  3. Undivided Account

    An underwriting system in which each underwriter in the group ...
  4. IPO ETF

    An exchange-traded fund that focuses on stocks that have recently ...
  5. Buy, Strip And Flip

    When a private equity firm buys out a target firm (usually with ...
  6. Book Building

    The process by which an underwriter attempts to determine at ...
Related Articles
  1. Investing

    IPO Winners For 2011

    These IPOs didn't get hyped like LinkedIn and Groupon, but they were much more successful.
  2. Investing

    How An IPO Is Valued

    The initial valuation of an IPO can determine the success or failure of a specific stock - but how is that price determined?
  3. Investing

    How To Track Upcoming IPOs

    Interested in investing through IPOs? Here is the list of free sources for information on upcoming IPOs.
  4. Fundamental Analysis

    Top Reasons IPO Valuations Miss The Mark (MS, ZNGA)

    The costly services of investment banks don’t necessarily guarantee accuracy in IPO pricing.
  5. Stock Analysis

    4 High-Growth IPOs to Own in 2013

    Initial public offerings (IPOs) are legendary for producing big gains for early investors. Stories about technology and pharma IPOs surging higher permeate the Street, enticing many investors ...
  6. Investing

    IPO Frenzy: From Microsoft To Facebook

    Facebook's IPO news has caused a frenzy. Discover if investing in IPOs is a good idea.
  7. Mutual Funds & ETFs

    Investing In IPO ETFs

    Learn the history, rules and risks of investing in IPO exchange-traded funds.
  8. Personal Finance

    Evaluating The Facebook IPO

    Facebook's IPO is sure to be the biggest IPO of the year. Find out what to expect.
  9. Investing

    Why Investing In IPOs Is A Foolish Move

    <p>So far 2014 has been the year of IPOs.</p> <p><span style="line-height:1.6em;">According to Renaissance Capital, "In terms of proceeds, 2...
  10. Chart Advisor

    Now Could Be The Time To Buy IPOs

    There has been lots of hype around the IPO market lately. We'll take a look at whether now is the time to buy.
RELATED FAQS
  1. Are IPOs available to short sell immediately upon trading, or is there a time limit ...

    The quick answer to this question is that an IPO can be shorted upon initial trading, but it is not an easy thing to do at ... Read Answer >>
  2. How can average investors get involved in an IPO?

    An initial public offering, or IPO, is the first sale of stock by a new company, usually a private company trying to go public. ... Read Answer >>
  3. What does the underwriter do in a new stock offering?

    Learn the role an underwriter plays for an initial public offering, and the steps an underwriter takes in preparing for an ... Read Answer >>
  4. How does an underwriter syndicate work together on an initial public offering (IPO)?

    Learn how underwriting syndicates work together when helping a company undertake an initial public offering, and learn about ... Read Answer >>
  5. Who can get access to a highly anticipated IPO?

    Purchasing a highly anticipated initial public offering may seem like a sound investment strategy, but most individual investors ... Read Answer >>
  6. Can mutual funds invest in IPOs?

    Learn whether mutual funds can invest in IPOs. IPO investing is appealing because there is a big upside, but there is considerable ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center