Book Building

The process of determining the price of an Initial Public Offering (IPO) based on demand from various investor groups.  The process is performed by an underwriter or book runner, which is usually an investment bank.  The book runner builds the book by looking at orders from institutional investors that shows how much these investors will purchase and at what price they are willing to purchase the shares of stock. The process occurs off the market and is confidential to the book runner.

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