Short covering and price stabilization of IPOs
AbstractThe price stabilization service consists of purchasing shares in the aftermarket in order to prevent price drops, and it is not mandatory. Using a sample of Italian IPOs, we find that only half of the IPOs that require this service are actually stabilized after going public and that price support is substantial for poorly performing IPOs. Nevertheless, the fees charged are not informative about the provision of this ancillary activity. Rather, the underwriter’s reputation is negatively associated to the stabilization activity. Negative price revisions and negative (or low) underpricing, also drive the provision of these services.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics and Technology Management, University of Bergamo in its series Working Papers with number 1204.
Date of creation: 2012
Date of revision:
Contact details of provider:
Postal: viale Marconi 5, 24044 Dalmine
Web page: http://www.unibg.it/struttura/en_struttura.asp?cerca=en_dige_intro
More information through EDIRC
IPOs; Underwriters; Investment banks; Gross spread; Price stabilization;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (University of Bergamo Library).
If references are entirely missing, you can add them using this form.