Just call us Bond. Amortized bond.
Over 700 finance terms, Shmooped to perfection.
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.
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.