From 11:00PM PDT on Friday, July 1 until 5:00AM PDT on Saturday, July 2, the Shmoop engineering elves will be making tweaks and improvements to the site. That means Shmoop will be unavailable for use during that time. Thanks for your patience!
We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.
© 2016 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Dutch Auction

Definition:

Uh, an auction held in Amsterdam? Well, maybe.

But in the land of money, it's a public offering where the offering price is decided by asking for bids. The bids are mulled over to find the price at which securities will be sold.  

Example

The Fabulous Fabulous Company is a start-up. You're not sure what they do, but you know it's something fabulous. The company is making a public offering via dutch auction. You submit a bid of $100 for 1,000 shares. Your sister submits her bid ($90 for 1,000 shares) and your dad submits his ($85 for 1,000 shares). The bids are all arranged in order from highest to lowest. The last successful bid is the one that wins. So if that bid is your dad, you (and your dad and your sister) will be able to buy 1,000 shares for $85.