when securities are oversubscribed companies can offer more of the securities raise the price of the security or partake in some combination of the two to meet demand and raise more capital in the process this means that they can raise more capital and at better terms 
companies will almost always hold back a significant portion of their shares to allow for future capital needs and management incentives so there is usually a standing reserve of shares that can be added if an ipo is looking to be badly oversubscribed without having to register new securities with regulators more capital is good for a company of course investors however have to pay higher prices and may get priced out of the issue if the price rises above their willingness to pay it may also hurt investors who herd into a hot ipo that drives the initial market price far above fundamentals only to see a collapse in price over the following weeks and months example of an oversubscribed ipoin early 2012 analysts indicated that the long awaited ipo of facebook now meta which initially sought to raise about 10 6 billion by selling around 337 million shares at 28 to 35 per share would generate far more interest from investors such that it might quickly become an oversubscribed ipo as predicted investor interest leading up to the ipo on may 18 2012 produced far more demand for facebook shares than the company was offering 1to take advantage of the oversubscribed ipo and fulfill that surge in investor demand facebook meta provided not only more shares 421 million versus 337 million or 25 more shares to investors but also raised the ipo price range to 34 to 38 per share around a 15 increase in price in effect facebook and its underwriters raised both the supply and price of shares to meet demand and diminish the securities oversubscription for a net increase in value of around 40 from the initial ipo terms as a result facebook raised more capital and carried a higher valuation but investors got the shares that they wanted 2however it quickly became clear that facebook was not at first worth the new ipo price as the stock fell precipitously in its first four months of trading the stock failed to trade above its ipo price until july 31 2013 of course in the years since the stock has performed quite well 3