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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.

Competitive Bid


When a company decides to go public and launch an IPO, they need someone to sell their stock; these sellers are underwriters. But how can a company choose the right underwriters for their IPO? Sometimes, through a competitive bid. Different underwriters submit closed bids and details of the terms they are offering, and the company compares the bids to find the cheapest or best underwriters.