Glossary

Placement

The sale of a newly issued security in the capital market.

In the case of new issues, an underwriting bank typically commits to purchasing the securities from the issuer. The shares are then subsequently sold to the public by the underwriter. The underwriting bank receives compensation from the issuer in return for bearing the risk that there will be insufficient demand for the securities. A placement is considered successful when the majority of the shares are acquired by investors in the market.

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