Investment BankingThe activities of a firm when serving as intermediary between an issuer of securities and the investing pubic.
Firm CommitmentAn arrangement whereby investment bankers purchase the new issue shares of a company outright for resale to the public.
Best EffortsAn arrangement whereby investment bankers, through options to purchase, agree to do their best to sell a new issue to the public.
All or None
An arrangement giving the investment bankers the right to cancel the agreement if a new issue is not fully subscribed.
SyndicateAlso called the purchase group. A group of underwriters that agrees to purchase a new issue of stock from the issuer for sale to the public.
Selling ConcessionThe discount given by the syndicate to members of the selling group.
StabilizationActivities by an underwriter to support the offering price of a new issue stock in the aftermarket.AftermarketThe trading of a new issue stock after it has been fully subscribed.