A firm that brings out new securities issues, agreeing to purchase and resell them. Often a lead underwriter and several other underwriters will work together on a given issue.
Investing terms and definitions starting with
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Generally, an investment bank that guarantees prices on securities to corporations and bears the risk of selling the securities for a profit to the public.
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A company or an individual who administers the public issuance and distribution of securities from an issuing body or the corporation
An investment banking firm committed to successful distribution of a public issue, failing which the firm would take the securities being offered (that is, buy) into its own books. Some countries also provide for underwriting on best effort basis.
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An underwriter or a Broker-dealer who trades with other broker-dealers, rather than with the Retail investor.
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DEFINITION of 'Lead Underwriter'
A investment bank or other financial outfit that has the primary directive for organizing an initial public stock offering, or a secondary offering for companies that are already publicly traded.
Agreement among underwriters comes into play when the securities companies issue or introduce certain stocks or bonds in the market, ...
Eating Stock - Eating stock is a term used by investment companies and underwriters. When not enough buyers are found to purchase stock, the underwriter is forced to purchase the stock himself.
Chartered Property/casualty Underwriter / Cpcu
A professional designation given by the American Institute for Chartered Property Casualty Underwriters. National examinations and three years of work experience are required.
~s come in: They work to set fair market value and initial stock price, generate interest in the company and the IPO and help develop the prospectus ...
~ (Investment Banker)
An intermediary between the offering institution and the investing public, bringing the new issues to the market while charging the issuer a fee for the services provided.
The process by which investment bankers bring new issues to the market.
~ short selling and price stabilization
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~ Discount ~s buy the to be issued securities at a reduced (discounted) price. This discount is usually measured as a percent of the price of the issue.
Undiversifiable Risk See Market Risk.
Unfriendly Takeover See hostile takeover.
The underwriters make their money by selling the new securities at a markup from what they paid for it, known as the underwriting discount, or underwriting spread.
~ " a firm, normally a brokerage, that agrees to buy the new issue of a company at a fixed discounted price, which they will then sell to the public at retail value
value investing " buying shares that sell for less than the company's actual worth per share ...
The securities dealer who purchases a bond or note issue from an issuer and resells it to investors. If a syndicate or selling group is formed, the ~ who coordinates the financing and runs the group is called the senior or lead manager.
~ : To assume risk of buying a new issue of securities from the issuing corporation or government entity and reselling it to the public.
Unsystematic risk : Risk that is company specific and can be eliminated through diversification (thus also known as diversifiable risk).
The head of a syndicate of financial firms that are sponsoring an initial public offering of securities or a secondary offering of securities. Could also apply to bond issues.
A stock or group of stocks that is the first to move in a market upsurge or downturn.
The brokerage house that is responsible for IPO.
Leveraged Buy Out ...
When an underwriter can't find buyers for a stock and therefore has to buy them for his own account.
EASDEasy moneyEating stockEBAEBIAT ...
~ - an organization, usually a bank, that purchases a share issue, hoping to sell it to the public; an insurance company that undertakes to meet losses.
unearned income - income from property (rents) and investments (interest and dividends) as opposed to wages or salaries.
A financial institution that assists in the issue of new securities by agreeing to purchase any unsold securities, thereby guaranteeing that they will be fully ...
~s: An intermediary between an issuer of a security and the investing public, usually an investment bank.
Investors: An individual who purchases assets, in this case stock, with the objective of gaining a financial return.
~s involved with the Twitter IPO aimed to price the social network's stock at USD 27, barring any last-minute hitches.
Early Twitter investors double on consumer web start-ups ...
See: Gross spread
Acting as the underwriter in the issue of new securities for a firm.
~s inflated the addressable market because they raised the IPO price from 15 initially to 20 and then it rallied to 40
This is an interesting take on it ...
This is a securities firm that helps a company go public.
~: brokerage house participating in an IPO.
Uptick: a stock trade executed at a higher price than the previous trade.
Uptrend: stock price is trending higher.
~. Usually a firm that acts as an intermediary between the company and the investing public in connection with the sale of the company's securities.
~ WARRANTS. Compensation to the underwriter in the form of warrants to purchase common stock.
~ (Investment Banker) - In a municipal underwriting, a brokerage firm or bank that acts as a conduit by taking the new issue from the municipality and reselling it. In a corporate offering, the underwriter must be a brokerage firm.
The ~s in consultation with the company decide on the basic terms and structure of the offering well before trading starts, including the percentage of shares going to institutions and to individual investors. Most ~s target institutional or wealthy investors in IPO distributions.
In order to sell its shares to the public, a company first needs to retain the services of an investment banker to underwrite the issue. The role of the ~ is to raise capital for the issuing company.
The ~s may say, "You know, we want the stock to sell for $25 per share because that seems affordable so we are going to cut the company into 440,000 pieces, or shares of stock (440,000 shares x $25 = $11,000,000.) That means that each "piece" or share of stock is entitled to $2.
The ~ sets the offering price based on the amount of capital the company wants to raise and the level of demand from investors. The opening price is set by supply and demand.
The ~s play a vital roles in insurance business. Why there are differences in premiums paid by insurance companies?
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Following the financial scandals associated with the 1929 stock market crash, the US Congress passed the 1933 Securities Act, which regulated the issuance of securities. The Securities and Exchange Commission (SEC) was formed with authority to enforce the act.
agreement among ~s (investment & finance)
agricultural futures (investment & finance)
AICPA (investment & finance)
AIMR (investment & finance)
air pocket (investment & finance)
air pocket stock (investment & finance)
airport revenue bond (investment & finance) ...
An investment banker who assumes the risk of bringing a new securities issue to market. The ~ will buy the issue from the issuer and guarantee sale of a certain number of shares to investors; this is firm-commitment underwriting.
One major player that is paid is the ~, or the investment bank hired by the company to serve as a middleman between the company and investors.
An agreement an ~ makes to act as an agent between an issuing company and investors.
Blitzkrieg Tender Offer ...
Agreement Among ~s
A contract between participating members of an investment banking syndicate. This contract is sometimes called a syndicate contract or purchase group agreement.
Agreement among ~s: The contract that governs the syndicate members in a negotiated offering.
Agreement of limited partnership: The contract between the general partners and the limited partners that governs the limited partnership.
[ITDS] account or underwriting account An association of ~s (headed by a manager or joint co-managers) formed in accordance with an agreement among ~s for the purpose of purchasing an issue from an issuer and reoffering it or sale to investors.
Source: Cecile Gutscher, "SEC Is Examining Whether Some ~s Are Marketing Bonds at Artificially Low Yields", Wall Street Journal, 5/2/97). 8/28/01 Bulldog bond Definition: A bond, denominated in British pounds sterling, that a company or government that is foreign to the U.K.
Forward Refunding - An agreement, usually between an issuer and the ~, whereby the issuer agrees to issue bonds on a specified future date and an ~ agrees to purchase such bonds on such date.
The ~ establishes the schedule for the issue, pricing of the stock, as well as the distribution of shares.
Letter of Intent: drafted between the issuing company and investment bank / ~.
One who arranges long-term financing by acting both as an ~ and as an advisor.
Mutual funds, Closed-end companies, and other companies that are principally engaged in the business of investing the funds of shareholders.
An IPO is typically done through an ~ who will act as the "sales" agent for the company. The deal may be structured through the employment of a single firm, or multiple. Typically, larger deals are underwritten by a syndicate.
For instance, the best effort contract mandates that the ~ sells as much stock as possible at the agreed price. The all-or-none contract mandates that the investment bank sells the whole stock or the contract is considered void.
Investment banker - Also known as an ~. The middleman between the corporation issuing new securities and the public. The usual practice is for one or more investment bankers to buy outright from a corporation a new issue of stocks or bonds.
Also known as an ~. The middleman between the corporation issuing new securities and the public. The usual practice is for one or more investment bankers to buy outright from a corporation a new issue of stocks or bonds.
A company that lists on the exchange can enlist the help of an IPO ~. It overtakes project management and organizes numerous tasks that have to be completed prior to an IPO. These include the creation of a time plan or getting in touch with analysts.
The person who values a company is called an '~'. So they approach an ~ who checks their past records, future prospects, background of the promoters etc, The ~ decides that the company is worth 10 times its current profits.
Flipping: The practice of purchasing shares in an offering from the ~ of the offering and then quickly selling them to individual investors at higher prices.
Yield burning is a method of financing municipal bonds which involves an ~ placing large markups on US Treasury bonds used to compensate investors while waiting for repayment of old bonds after issuance of the new bonds. As bond prices and yields move inversely, marking up the price causes ...
Investment Banker - See ~.
Investment Trust - Company whose sole business consists of buying, selling and holding shares.
IPO Date - The date that the security started publicly trading.
IPO costs are typically 7.5% to 8.5% of the value of the company, including ~'s commission, legal and accounting fees, investor relations, printing, road show and an initial listing fee. For a $25 million offering, that's between $1.875 million and $2.125 million.
The first trade represents demand in the public market. Since the ~ is also the market maker, (for Nasdaq stocks) they know exactly how many shares its institutional clients want to sell. They may even counsel clients to control the available supply.
institutional pot The portion of a new issue that is set aside by the lead ~ to place with institutional investors. Also known more simply as the pot.
institutional rotation Per ModernIR: Locking periodic gains, fund rebalancing, generally for strategic reasons.
When private companies reach a point that they need a lot of capital in order to grow their company at a rapid rate, they can "go public" to raise capital by offering shares of their stock to the general public. The company generally sells shares to an ~ at a predetermined price and the ...
Underwriting - The selection process for insurance applicants. ~s classify applicants according to their degree of insurability and set premiums accordingly. The process also weeds out unacceptable risks and rejects them.
direct public offering (DPO) - an initial public offering that bypasses the traditional ~ and offers shares directly to the public over the Internet. Also called an online stock offering.
direct stock plan (DSP) - see direct investment plan (DIP) ...
An over-allotment option, also known as a "greenshoe option", allows an ~ to increase the principal amount of a bond issue when there is a strong demand for a new issue.
Underwrite - underwriting is effectively a guarantee wherein the ~ (usually a bank, broker or financial institution) agrees to purchase a certain number of shares in the event the issue is under-subscribed for a certain fee.
BUT, it's likely restricted to the wealthiest, most active investors: "Fidelity, which will be getting an undetermined number of shares from ~ Deutsche Bank, says customers should have $500,000 in their accounts and have made 36 trades in the past year to be eligible.
The banksters pressured the rating agencies to rate the investments without allowing ~s to look at individual loan documentation. Where I was born they call this falsification, fraud, extortion and bribery.
The good news is that this credit risk in most situations is very minor. Institutional investors can "redeem" (or get their money back) from the ~ of an ETN on a daily basis. While anything can happen, you can usually see major bank defaults coming more than a day or two ahead of time.
GuideStone Funds shares are distributed by Foreside Funds Distributors LLC, a registered broker-dealer and ~ of the funds, 400 Berwyn Park, 899 Cassatt Road, Berwyn, PA 19312.
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Investors will often apply for more shares than required in anticipation of only receiving a fraction of the requested number. Investors and ~s will often look to see if an IPO is oversubscribed as an indication of the public's perception of the business potential of the IPO company.
22. The Warrant or Option Short Sale. Buyer holds the right to exercise warrants or options, but doesn't do so. Instead, they sell short the stock and use the options or warrants as insurance. This was popular among VSE ~s in the 1980s-1990s ...
Lloyds of London is the location of a very large percentage of all the reinsurance undertaken globally. The underwriting is carried out by small groups - known as syndicates - of which there are many, as well as ~s and agents all housed in the same landmark building.
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In addition, a lot of company information, such as earnings, must be publicly available and a great deal of effort is expended keeping investors informed about the company. The company must also pay independent ~s, attorneys, and accountants.
He is in the market to make profits by buying low and selling high. Speculators are very important to a market. They make it more liquid and often take the opposite side of hedgers' trades. In this way, they act as a type of insurance ~ by bearing the risk which hedgers seek to avoid.
He counsels clients involved in all aspects of the financial services industry. Mr. Gould represents US registered investment companies, hedge funds, offshore investment companies, investment advisers, retail and institutional broker-dealers, and municipal bond ~s.
See also: What is the meaning of Underwrite, Market, Stock, Trading, Securities?