The world’s most valuable company, Saudi Aramco, applied greenshoe option offering to raise their capitalisation by 450 million dollars.
A greenshoe option is an over-allotment option. Greenshoe option is used during public offering, if the demand for a security issue proves higher than expected. It gives underwriter the right to sell more shares to investor than was initially planned by issuer.
Aramco sold 3 billion shares and initially earned 25,6 billion dollars in its IPO. The company is currently traded around 34,8, after declining to its lower price on Jan. 8 after problems between the USA and Iran.