Dutch Auction
A dutch auction, also referred to as a single price auction, is an auction system in which the seller gradually lowers the price until a responsive bid is met.
Buyers can bid any price they desire and the asset is sold at a single price to buyers whose bid price is at or higher than the auction-set price.
Government treasuries like the U.S. Treasury often employ dutch auctions to sell Treasury notes. Google used a dutch auction to sell shares to investors in its IPO. Google did this to democratize share allocations to institutional investors and get the best price for its shareholders.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
- Connect with Kris:
