Allocation is the systematic distribution of business resources between different entities and over time.#

  • This usually refers to the distribution of shares granted to a participating underwriting firm during an initial public offering.
  • Allocations are usually made when demand is high and exceeds demand.
  • Companies can also distribute shares through share splits, employee share options and rights offerings.
  • The main reason a company issues new shares for placement is to raise funds to finance business operations.