Definition of Fully Subscribed

What does the term "fully subscribed" mean? What is meant by the term "fully subscribed"?

When a company goes public, underwriting firms are used to sell shares of the public offering to investors.

Definition of the term - Fully SubscribedThe goal of an underwriting firm is to price an offering so that all available shares are sold to investors. In addition, the price of the offering should be high enough so that there isn't TOO much demand for the offering. The last thing that an underwriting firm wants is to underprice an offering, because that means that the issuing company could have raised substantially more capital. On the other hand, if an issue is "undersubscribed", then this means that the underwriting firm wasn't able to successfully place all of the shares with investors.

The term "fully subscribed" means that all available shares of a public offering have been successfully sold to investors.

If an underwriting firm feels as though demand for an offering is higher than initially anticipated, then they can raise the offering price. If they feel that demand will be lower than expected, then they can lower the offering price.

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