Short covering and price stabilization of IPOs
The 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.
|Date of creation:||2012|
|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
When requesting a correction, please mention this item's handle: RePEc:brh:wpaper:1204. See general 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.