Fully Subscribed

AAA

DEFINITION of 'Fully Subscribed'

A situation in which an underwriting firm has successfully sold to investors all of its available issues of a public offering of securities. When the issue is fully subscribed, the underwriter's risk of being undersubscribed (being unable to sell its allotment of the issue) is completely removed.

Also referred to in slang terms as "pot is clean".

INVESTOPEDIA EXPLAINS 'Fully Subscribed'

Typically, the goal of a public offering is to price the security issue at the exact price at which all the issued shares can be sold to investors, so there will be neither a shortage nor a surplus of securities. If there is more demand for a public offering than there is supply (shortage), it means a higher price could have been charged and the issuer could have raised more capital. On the other hand, if the price is too high, not enough investors will subscribe to the issue and the underwriting company will be left with shares it either cannot sell or must sell at a reduced price, incurring a loss. Therefore, getting an issue to be perfectly fully subscribed is a difficult and complex balancing act.

RELATED TERMS
  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. Red Herring

    A preliminary prospectus filed by a company with the Securities ...
  3. Pot Is Clean

    A slang phrase referring to a situation in which an underwriter ...
  4. Underwriting

    1. The process by which investment bankers raise investment capital ...
  5. Oversubscribed

    A situation in which the demand for an initial public offering ...
  6. Public Offering Price - POP

    The price at which new issues of stock are offered to the public ...
Related Articles
  1. Brokers

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  2. Fundamental Analysis

    Interpreting A Company's IPO Prospectus Report

    Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future.
  3. Investing

    5 Tips For Investing In IPOs

    Thinking of investing in IPOs? Here are five things to remember before jumping into these murky waters.
  4. Retirement

    IPO Basics Tutorial

    What's an IPO, and how did everybody get so rich off them during the dotcom boom? We give you the scoop.
  5. Entrepreneurship

    Which is The Best Bank for Your Buck, BAC or MS?

    One things stands out between these financial services giants when it comes to investing in them.
  6. Investing

    What's Investment Banking?

    An investment bank is a special type of bank involved in a variety of large and complex financial services for major institutions.
  7. Trading Strategies

    Is Goldman Sachs Still A Winner?

    Goldman Sachs might not be the best dividend play out there, but there are other reasons you might want to consider it as an investment.
  8. Investing Basics

    The 10 Biggest Latin American Banks

    Brazil is home to most of the major banks in Latin America, claiming six of the ten largest financial institutions in the region.
  9. Investing Basics

    What's the Role of an Investment Bank?

    Investment banks provide financial advice to businesses and governments and help them raise capital through the sale of stocks, bonds and other products.
  10. Investing Basics

    The World's Top 10 Investment Banks

    These banks come out on top as measured by revenue numbers, global reach, employee headcount, income, and a number of other factors.

You May Also Like

Hot Definitions
  1. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  2. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  3. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  4. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  5. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  6. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
Trading Center