Undersubscribed

When referring to an investment, venture, or offering, 'undersubscribed' describes a situation where the number of commitments or applications received falls short of the available supply or the target amount. This often indicates a lack of interest or confidence from potential investors or participants. The term is frequently used in finance, particularly concerning initial public offerings (IPOs), bond sales, and fundraising campaigns. It highlights a potential risk, as the entity may not reach its financial goals.

Undersubscribed meaning with examples

• The company's initial public offering was heavily undersubscribed. Institutional investors showed little interest due to concerns about the company's long-term growth prospects and the overvaluation of their shares. The underperformance of the IPO led to a significant drop in the stock price post-launch and a scramble to find alternative funding sources.
• The bond offering for the new infrastructure project was undersubscribed. The low interest rates offered and the perceived risks associated with the project's completion deterred many investors. Consequently, the government had to revise the terms, increasing the yield to attract enough buyers and secure the necessary funding.
• The crowdfunding campaign for the new independent film was undersubscribed, falling far short of its target goal. Limited marketing reach and competition from other projects may have contributed to this issue, along with doubts about the quality of the planned film. The creators had to seek other financial solutions to get it off the ground.
• The university's scholarship program was undersubscribed this year, with fewer applications than scholarships available. The decrease in applications could be linked to an economic downturn or lower awareness of the opportunities. The university had to extend the deadline and advertise more to attract applicants.