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Greenshoe, or a greenshoe option, is a provision of a share offering that allows the underwriter to sell more shares than actually issued in a mechanism to stabilize the share price.
Some of the smaller shareholders in Nova Plant, Inc. were surprised by the increased volatility in the share price after the underwriter, GoldBank, came to the end of its greenshoe option period.
Also called an over-allotment option, this mechanism typically is used as part of an initial public offering (IPO). With such option, an underwriter sells more shares than issued (enters into a short position) so that it is able to buy back the extra stock in the event the demand will be low, thereby pulling up the share price. When demand is high and the share price is above the offering price, then the underwriter exercises the option and purchases the additional shares from the issuing company at the offering price in order to cover its short position. The term “greenshoe” is a reference to the first company that granted such an option, Green Shoe Manufacturing. An inverse provision, whereby an underwriter is authorized to sell shares back to the issuer, is called a reverse greenshoe.
Greenshoe, neboli greenshoe opce, je podmínka emise akcií, která umožňuje upisovateli prodat více akcií, než bylo skutečně vydáno, coby mechanismus pro stabilizování ceny akcie.
Někteří z malých akcionářů společnosti Nova Plant, Inc. byli překvapeni zvýšenou volatilitou cen akcií poté, co skončilo období greenshoe opce upisovatele GoldBank.
Také se nazývá opce navýšení. Tento mechanismus se běžně používá jako součást primární emise akcií. S touto opcí upisovatel prodá více akcií, než bylo vydáno (tj. vstoupí do krátké pozice), aby mohl přebytečné akcie odkoupit v případě nízké poptávky a tím navýšit cenu akcií. Když je poptávka vysoká a cena akcií je vyšší než nabídková cena, upisovatel uplatní opci a koupí od emitující společnosti dodatečné akcie za nabídkovou cenu, aby pokryl svou krátkou pozici. Termín „greenshoe“ odkazuje na první společnosti, která takovou opci poskytla, Green Shoe Manufacturing. Opačná podmínka, která opravňuje upisovatele prodat akcie zpět emitentovi, se nazývá reverzní greenshoe.
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Simply subscribe to receive our Business Term of the Day at no charge to your inbox each business day, with explanation in English and Czech.
