Overshopped

Definition of 'Overshopped'


The perception that a firm's attempt to raise capital by selling equity or debt through a private or public offering is an act of desperation. When a company's management overshops a financing deal, it leaves investment banks, bridge financiers, lenders and private equity groups wondering why they should be the ones to take on the risk of financing a project that others have rejected.

Investopedia explains 'Overshopped'


The more rejections a company receives in trying to set up a financing deal, the closer it comes to being overshopped. Financiers closely scrutinize all financing deals, but overshopped deals receive extra scrutiny because more rejections imply a greater likelihood that the terms of the deal are flawed. Thus, financiers avoid overshopped deals. Even if there isn't anything wrong with a company that has been overshopped, repeated rejection tends to hurt the company's reputation. Overshopping can occur at various stages in the financing process and may involve parties that are not even capital financiers; the opinions of accountants, lawyers and insurance companies also count.


Filed Under:

comments powered by Disqus
Hot Definitions
  1. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another market so that it balances out. So when examining a specific market, if all other markets are in equilibrium, Walras' Law asserts that the examined market is also in equilibrium.
  2. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.
  3. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following:
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction.
  5. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious debt when government leaders use borrowed funds in ways that don't benefit or even oppress citizens. Some legal scholars argue that successor governments should not be held accountable for odious debt incurred by earlier regimes, but there is no consensus on how odious debt should actually be treated.
  6. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.
Trading Center