what is share auctioning? How it is done?

Answer 1

There are several different ways to offer shares for sale:

1) General offer. This is the open market, where one can buy and sell shares of publicly listed companies. This is the most common way of selling shares for publicly listed companies.

2) Private offer. Buying and selling does not have to be done publicly. Transactions can be done "over-the-counter", where two counter-parties agree on a price with each other (as opposed to using the exchange as an intermediary). This can be done for publicly listed shares. This is the primary way to buy/sell private companies.

3) Auction. Rather than selling company shares at an extended offer-accept/reject bidding process, shares can be sold in a single auction. At an auction, buyers place their bid (either in an open process where one knows the highest price or "blind" where the highest price is unknown) at a predermined time. Shares are sold to the highest bidder. The singular bidding time commonly acts as a motivating sales tactic to get emotions involved (i.e. people don't like to lose). This is not commonly done to sell shares because it is complicated and needs the market infrastructure to set it up. The most famous example of this was Google's IPO. In reality, most shares are sold via auction but there is a price range cap that keeps them from being true auctions. This is where you hear IPOs pricing "at the top of the range". A share auction works basically like any other auction. You put in your price, escalating your price if you are outbid until time expires. Highest bidder wins.