Greenshoe

In finance, a “greenshoe” or “greenshoe option” refers to a provision which may be included in a public offering prospectus. A greenshoe gives the company making the public offering the right to issue additional shares if demand for shares following the public offering exceeds the original number of shares issued.

Typically, additional shares issued in accordance with greenshoe options are supplied to public offering underwriters at the same rates used in the original public offering.

See also: Subscription right

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