When The Underwriter is The Market Maker : An Examination of Trading in The IPO Aftermarket  

Oleh:

O' Hara, Maureen ; Michaely, Roni ; Ellis, Katrina

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 55 no. 3 (2000), page 1039-1074.
Topik: ipo; securities trading; studies; investment bankers; going public; statistical analysis; profits
Fulltext: p 1039.pdf (567.91KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88.2 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

This paper examines aftermarket trading of underwriters and unaffiliated market makers in the three - month period after an IPO. We find that the lead underwriter is always the dominant market maker, he takes substantial inventory positioning the aftermarket trading, and co - managers play a negligible role in aftermarket trading. The lead underwriter engages in stabilizaiton activity for less successful IPOs, and uses the overallotment option to reduce his inventory risk. Compensation to the underwriter arises primarily from fees, but aftermarket trading does generate positive profits, which are positively related to the degree of underpricing.

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