How do auctions work?

In the Primary Market, the allocation of shares to investors placing bids during a live catalogue auction follows the principles of the ‘Dutch Auction Model’.

During the auction, investors have a number of days or weeks to insert bids for the music catalogue they wish to acquire shares from, by specifying the number of shares (Budget view) and/or price per share (Price view) they would like to pay. 

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At the end of the ‘Auction Period’, once all the bids have been submitted our system gathers all the standing bids and orders them by price. Following the ‘Dutch Auction Model’ principles, the final price gets determined as the lowest of all the highest prices allowing the totality of the auction target to get completed. Of course, the final price needs to be equal or higher to the minimum price set by the original transferor.

The shares are then assigned to bidders from the top order down, yet following the chronological order in which the different bids were placed, until all available shares are assigned.

The price that each bidder pays is based on the lowest price of all the allotted bidders, or essentially the last successful bid. Therefore, even if you bid €500 for 100 shares, if the last successful bid is €4.50 per share, you will only have to pay €4.50 per share, or €450 for all 100 shares.