search query: @indexterm Initial Public Offerings / total: 176
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| Author: | Jenkinson, T. Jones, H. |
| Title: | The economics of IPO stabilisation, syndicates and naked shorts |
| Journal: | European Financial Management
2007 : SEP, VOL. 13:4, p. 616-642 |
| Index terms: | initial public offerings stabilization syndicated loans |
| Language: | eng |
| Abstract: | Stabilisation is the bidding for and purchase of securities by an underwriter immediately after an offering for the purpose of preventing or retarding a fall in price. Stabilisation is price manipulation, but regulators allow it within strict limits - notably that stabilisation may not occur above the offer price. For legislators and market authorities, a false market is a price worth paying for an orderly market. This article compares the rationale for regulators' allowing IPO stabilisation with its effects. It is found that stabilisation does have the intended effects, but that underwriters also seem to have other motives to stabilise, including favouring certain aftermarket sellers and enhancing their own reputation and profits. |
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