What is a price range and what does it mean?

What is a price range and what does it mean?

The price range of an offering is usually in $2 increments ($18-$20 as an example). The Underwriters and Issuers believe the company is worth a price per share in this range. Institutional Investors place orders usually within this range, but sometimes above or below the range. Once the underwriters have enough institutional orders, they will agree on a final offering price per share with the issuer, usually within the range. Be prepared for offerings priced above or below the range, this does happen, but not very often. The price range is just a guide.

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