Book Building

Book building is a process used by companies to gauge investor interest and determine the price of a new stock offering. During this process, underwriters invite institutional investors to submit bids specifying how many shares they want and at what price. This helps the company understand the demand and price expectations, enabling them to set an optimal offering price. Essentially, it’s a way to "build" a "book" of investor interest, ensuring the shares are priced fairly based on market demand, leading to a successful initial public offering (IPO).