|This article is an orphan, as no other articles link to it. Please introduce links to this page from ; try the Find link tool for suggestions. (August 2008)|
In this offering, the firm announces a minimum (reserve) price. Investors place sealed bids for quantity and price. When the bids are in, the firm negotiates a minimum and maximum price with the market regulator (the Société des Bourses Françaises, or SBF).
Any bid above the maximum price is eliminated as a virtual market order. The bidders who bid between the minimum and maximum price are awarded shares on a pro rata basis, each paying the minimum price.
In the event that demand for the stock is too high, the IPO may be changed to fixed-price offering.
- McDonald, John G.; Jacquillat, Bertrand C. (1974), Pricing of Initial Equity Issues: The French Sealed-Bid Auction, Journal of Business 47 (6): 37, doi:10.1086/295606
- Derrien, Francois; Womack, Kent L. (2003), Auctions vs. Bookbuilding and the Control of Underpricing in Hot IPO Markets, Review of Financial Studies 16 (1): 31–61, doi:10.1093/rfs/16.1.31
|This economics-related article is a stub. You can help Wikipedia by expanding it.|