The range of share offer price refers to the pricing of new shares before entering the market, which is a game behavior under the condition of incomplete information. This means that it is very difficult and unrealistic to determine the issue price of new shares very accurately. However, the determination of the issue price of new shares is the most basic and important part of the issuance of new shares. The price of new shares determines the success of the issuance but also affects the fundamental interests of the participants, as well as the specific performance of stocks after listing.
Usually, the lead underwriter determines the price range of the new share issue, holds a roadshow promotion meeting, repeatedly modifies the issue price according to the demand quantity and demand price information, and finally determines the issue price.
When the issue price is low, it is easier to issue new shares. However, if the issue price is too low, it may damage the interests of the original shareholders, and the amount of funds raised is small, also the financing needs of the issuing company are difficult to meet, which is not conducive to the long-term development of the company. If the issue price is too high, it will increase the issue risk and difficulty of the underwriter, and will also increase the cost of investors, inhibit the enthusiasm of investors to subscribe, thus ultimately affecting the financing demand of the issuing company.