Dutch auction
Definition
Dutch auction, also known as descending price auction, uses a bidding process to find an optimal market price for the stock, the lowest price at which an issuing company can sell all the available shares. An alternative to the traditional negotiated pricing process used by underwriters to set IPO prices, it was most recently employed by Google and is used for US Treasury auctions. Named after the famous auctions of Dutch tulip bulbs in the 17th century, it is based on a pricing system devised by Nobel prize winning
economist William Vickrey.
 Cite this definition
'Dutch auction
' appears in the definitions of these terms on BusinessDictionary.com
forward auction, auction rate bond
Related Research Articles from the InvestorGuide.com University
Investment ChoicesAn overview of the different types of investment choices available to the potential investor. Learn about short and long term investments, stocks, bonds, and mutual funds. 
Buying and SellingLearn the best time to buy or sell an investment. Also suggests templates for investment analysis and transaction records.
Initial Public OfferingsWhat happens when a company decides to go public and sell stock? Learn about the reasons for an IPO, why performance matters, and how you can make money off the IPO market.
Related Resources from InvestorGuide.com
Stock of the Day NewsletterLearn about stocks that are making headlines today by signing up for our free newsletter. Stock Research ToolUsing our stock research tool, you have access to our stock tracker, quotes, interactive charts, news, analysis and profile information. Click here to use our stock research tool or enter a stock ticker here: Featured Sponsor
|
