Book Building

Book Building - Book building is a process used to determine the price an initial public offering will be offered at. This book records the prices that the investors interested in the offering are willing to pay for each share, but when the books is closed, an underwriters, an intermediary between the issuer and the investor who is usually an investment bank, will analyze all the information recorded and the values the investors are willing to pay. This determines the issue price that will be available when the shares are listed for sale. By doing it this way, it is guaranteed to be fair to both the buyers and the sellers.