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Categories: Trading

A Swedish punk band? A brand of home pregnancy test? Nope. It’s a description of a particular market condition.

Specifically, it describes a circumstance where stocks are overbought. It suggests that buying in the stock market has gone too far, and that a correction might be on the horizon.

Related or Semi-related Video

Finance: What is Oversubscribed?3 Views

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finance a la shmoop what is oversubscribed ask your grandparents

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about the magazine industry it produced a product that looked like this and [Pile of magazines appear]

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buyers subscribed to it weekly monthly something like that every now and then

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an issue would come out that was so popular so catchy so got a must have it [Playbond magazine appears]

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right now that it was quote oversubscribed unquote and the printing

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presses had to run another 24 hours straight to make up for the huge demand

00:32

well in the land of finance that term oversubscribed is usually ascribed to a

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hot IPO when you subscribe in a securities offering you're essentially

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signing up to buy a given volume of that security at a given price within a

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certain time window that is a given company whatever dot-com offers five

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million shares to the public at ten bucks a share

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but the Roadshow was such a hit that the bankers could raise prices to twelve

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bucks a share and then exercise their greenshoe option and sell a whole trunk [Greenshoe option definition appears]

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full of additional shares to the public making Commission's on all of them more

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shares higher prices and it sounds like a twisted Walmart slogan well the shares [Wal-Mart store appears]

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being over subscribed were all a result of the extremely hot and high demand for

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shares by the investing public so yeah that's over subscribed on Wall

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Street problem we here at shmoop would love to have go ahead and click and buy [Shmoop video appears on webpage]

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we got to keep the rent behavior somewhere

Up Next

Finance: What are Overbought and oversold?
1 Views

What are overbought and oversold? Hit play to find out.

Find other enlightening terms in Shmoop Finance Genius Bar(f)