1: subscription definition
2: how subscription works
3: subscription vs non-subscription
4: Example of subscription
Opening information:
subscription means a collection of agreements to receive something from any of the publications or content.
This publication or content would be any type, but the principle of subscription would be the same for everything, which is to connect with users or consumers.
Now let’s have a look at what is a subscription, how a subscription works for the corporate industry, and what is the difference between a subscription and a nonsubscription, finally one example of a subscription.
1: subscription definition
Mr. Martin is an online entrepreneur, who created the blog website and generates hundreds and thousands of sign-ups every day.
Once the sign-up was made, tartan had an advantage to send the sending-cation signal to their sign-up a used-up time to engage with them more and more.
Martin’s blog had a large amount of Investors each month, which is nearly about 25 million users.
This is not the exact amount of traffic for a Martin blog, sometimes the 25 million traffic is changeable each month by month, but based on average calculations, the Martin blog would receive 15 million traffic.
Among the 15 million traffic users, not all are converted into long-term members of the Martin blog. So normally Martin could turn 20 percent of the TC into his members of the business in a total of 100 percent traffic.
After certain traffic users turn into members of Martin’s blog, then Martin sends his members a daily notification about his newly released blog.
Here 20 percent of the traffic that is turning into members of the Martin blogs in the total amount of 100 percent traffic is called a subscription.
The 20 percent of members are subscribers of the Martin blog, and Martin had a 20 percent subscription on the total received monthly traffic.
So now let’s see how this same subscription works in the stock market for all the Corporate industries.
2: how subscription works
Every public company when issued public stocks on the (IPO) initial public offering through the investment banks does not sell all the shares from the issued company.
Normally after determining the authorized shares, Corporations only issue part of the amount of shares in a total of authorized shares.
Among the issued shares, not all the shares are sold to the public Investor, but it is also possible to sell whole issued stocks from the
Specific Corporation.
So any of the shares that are only sold on the IPO in the part of issued shares are called subscriptions of the IPO range.
According to the stock market, Subscription means sold shares or purchased shares in the IPO. Using this subscription, the investment bank which means underwriters would implement a lock-up period for all the purchased shares for not reselling the shares for a certain amount of days.
Security and Exchange Commission (SEC) had a certain rule on minimum subscription to pass on a business IPO when one newly IPO business doesn’t have enough subscriptions on the IPO market.
The certain Corporation would have to return the money to the whole purchased Investors.
So without a minimum subscription which is determined by the SEC rules, no business could able to move to the secondary market.
The minimum subscription varies based on the different countries’ SEC, so to check your own countries’ SEC rules, go to your own countries’ SEC websites to find the minimum Current subscription percentage on IPOs.
Next, let’s know the key difference between what is known as a subscription and nonsubscription.
3: subscription vs nonsubscription
The difference between the subscription and nonsubscription is, that subscriptions are the ones that are considered as a total purchase share in the total issued shares on the IPO process of the corporation business.
And non-subscription shares are the Ownership of the company with remaining nonpurchased shares in the IPO process.
So the key difference between the subscription and nonsubscription shares is purchasing. To make you more clear about the subscription let’s take a deep look at one example.
4: Example of subscription
Say the company K issued 6000 shares in an IPO process, and 4000 shares are only purchased from the Investors with a minimum subscription rate of at least 60 percent.
These 4000 purchased shares are called subscriptions, and the remaining 2000 shares which are still available after the issue of the company are known as nonsubscription shares anyway.
Compared to the total of 6000 issued shares with 4000 subscription shares, the subscription rate would be 66.6 percent.
So the company K Shares would have the authority to move to the secondary market without returning money to the purchased Investors.