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Undersubscription Meaning: Definition, Examples, and Translations

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undersubscription

[หŒสŒndษ™rsษ™bหˆskrษชpสƒ(ษ™)n ]

Definition

Context #1 | Noun

financial

A situation where the demand for a particular security is less than the number of shares or bonds available for sale.

Synonyms

underallocation, underperformance, underselling.

Which Synonym Should You Choose?

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Word Description / Examples
undersubscription

This term is typically used in finance and investment to describe a situation where the demand for a public offering of stocks or securities is less than the available supply.

  • The recent IPO faced an undersubscription, leading to fewer shares being sold than expected
underallocation

This term is used to refer to a situation where resources (such as funds, materials, or personnel) are distributed in insufficient quantities, often in planning and project management.

  • The underallocation of budget to the marketing department resulted in inadequate campaign efforts
underselling

This term is used in a negative context to describe selling goods or services at a price lower than their value or competitors' prices, which can imply a lack of proper valuation or desperation.

  • The company was accused of underselling their products during the clearance sale, impacting market prices adversely
underperformance

This word is often used to describe the failure to perform as well as expected or required, common in business, sports, and education.

  • The underperformance of the sales team this quarter has raised concerns among the senior management

Examples of usage

  • Due to the undersubscription of the IPO, the company had to lower the offering price.
  • The undersubscription of the government bond issue was a sign of weak investor interest.

Translations

To see the translation, please select a language from the options available.

Interesting Facts

Economics

  • In finance, undersubscription can affect fundraising rounds where fewer investors pledge to buy shares than expected.
  • It also applies to goods or services that have more supply than demand, leading to potential losses.

Marketing

  • Marketers analyze undersubscription to adjust their strategies, ensuring offerings meet customer interests.
  • Surveys and feedback are often used to understand why certain products or services didn't attract enough subscribers.

Technology

  • In the tech industry, software subscriptions may face undersubscription when users feel competitive options provide better value.
  • Emerging technologies often require adjusting marketing and education efforts to overcome undersubscription challenges.

Education

  • Undersubscription can occur in educational programs or courses that fail to draw sufficient student interest.
  • This prompts institutions to revamp their offerings or enhance outreach efforts to boost enrollment.

Origin of 'undersubscription'

Main points about word origin

  • The prefix 'under-' means less than or below, while 'subscription' comes from Latin roots meaning to sign up or agree.
  • The term is often used in business contexts to indicate a lack of anticipated interest or participation.

The term 'undersubscription' originated in the financial industry to describe a situation where the demand for a security is less than the supply. This can lead to price adjustments and lower-than-expected returns for issuers. The concept highlights the importance of market demand and investor interest in determining the success of offerings. Understanding undersubscription is crucial for companies, investors, and financial professionals involved in securities trading.