A B C D E-F G H I-J K-L M-N O P Q R S T U V-Z

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Offering Price
This is the price at which the IPO is first sold to the public. It is set by the lead manager, usually after the close of stock market trading the night before the shares are distributed to IPO buyers. In the case of some foreign IPOs, the pricing occurs over the weekend.

Offering Range
On the front page of the preliminary prospectus, the company indicates a price range within which they expect to sell stock. The range usually has a spread of $2. For example, $15 to $17. However, the ultimate price to the public may be above the range, below the range or within the range, depending on demand and market conditions.

One-on-ones
The most powerful institutional investors merit private meetings with the management of the IPO. As with the group road show presentations, management is limited in its discussion to what is contained in the preliminary prospectus.

Operating Margin
The operating margin of a company is a key measure of profitability and performance. The operating margin is determined by deducting operating expenses (e.g.. cost of goods and services, sales and marketing, general and administrative, and depreciation and amortization) from total revenues and then dividing the result by total revenues. Note that operating margin excludes interest expense, interest income, other income, one-time gains or losses and taxes.

Order Book
When the underwriter refers to how well orders are building for an IPO or a secondary deal, he means the book or listing of buy orders from investors. The book for a deal can be many times oversubscribed. In fact, an oversubscribed deal is desired by both underwriters and investors, because it means that there will be an initial pop in the stock when it begins trading and subsequent aftermarket orders.

Overallotment
This is the fancy name for the green shoe, the underwriting agreement which allows the underwriters to buy up to an additional 15% of shares at the offering prices for a period of several weeks after the offering.

Oversubscribed
When a deal has more orders than there are shares available it is said to be oversubscribed. Many underwriters like to see a book several times oversubscribed because they know that investors inflate the size of their indications of interest. When a book is grossly oversubscribed it is said to be a hot deal.

 

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