Fully Subscribed
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". |
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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. |
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