Let's guess the US offering price., page-85

This is how a greenshoe option works:

• The underwriter acts as a liaison, like a dealer, finding buyers for their client's newly-issued shares.
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• Sellers (company owners and directors) and buyers (underwriters and clients) determine a share price.
• Once the share price is determined, they're ready to trade publicly. The underwriter then uses all legal means to keep the share price above the offering price.
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• If the underwriter finds there's a possibility that shares will fall below the offering price, they can exercise the greenshoe option.

To keep pricing control, the underwriter oversells or shorts up to 15% more shares than initially offered by the company.

For example, if a company decides to sell 1 million shares publicly, the underwriters can exercise their greenshoe option and sell 1.15 million shares. When the shares are priced and can be publicly traded, the underwriters can buy back 15% of the shares. This enables underwriters to stabilize fluctuating share prices by increasing or decreasing the supply according to initial public demand.

If the market price exceeds the offering price, underwriters can't buy back those shares without incurring a loss. This is where the greenshoe option is useful, allowing underwriters to buy back shares at the offering price, thus protecting their interests.