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Publicação
Conflicts of Interest in the Underwriting of IPOs and Price Stabilization
Orientador(es)
Resumo(s)
Banks that supply capital and simultaneously underwrite securities for the same clients may benefit themselves or their clients at the expenses of investors by overpricing securities. We investigate this issue by analyzing price stabilization and short-term returns of IPOs. Our analysis suggests that equity-conflicted underwriters overprice IPOs and use price stabilization to disguise overpricing. The same does not happen with loan conflicted underwriters. We also show that the partial adjustment phenomenon may result from price stabilization, since it disappears after the stabilization is over.
Descrição
Palavras-chave
Universal Banking Conflict of interest Underwriting IPO Price stabilization Aftermarket short covering Partial adjustment
Contexto Educativo
Citação
De Carvalho, Antonio Gledson, Amaro de Matos, João, Pinheiro, Douglas Beserra and De Sa Mello, Marcio, Conflicts of Interest in the Underwriting of IPOs and Price Stabilization (June, 2015). FEUNL Working Paper Series No. 596