Conflicts of Interest in the Underwriting of IPOs and Price Stabilization

Bibliographic Details
Main Author: De Carvalho, Antonio Gledson
Publication Date: 2015
Other Authors: Amaro de Matos, João, Pinheiro, Douglas Beserra, De Sa Mello, Marcio
Format: Article
Language: eng
Source: Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
Download full: http://hdl.handle.net/10362/82746
Summary: 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.
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spelling Conflicts of Interest in the Underwriting of IPOs and Price StabilizationUniversal BankingConflict of interestUnderwritingIPOPrice stabilizationAftermarket short coveringPartial adjustmentBanks 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.Nova SBERUNDe Carvalho, Antonio GledsonAmaro de Matos, JoãoPinheiro, Douglas BeserraDe Sa Mello, Marcio2019-09-30T17:12:26Z2015-062015-06-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10362/82746engDe 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. 596info:eu-repo/semantics/openAccessreponame:Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)instname:FCCN, serviços digitais da FCT – Fundação para a Ciência e a Tecnologiainstacron:RCAAP2024-05-22T17:41:17Zoai:run.unl.pt:10362/82746Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireinfo@rcaap.ptopendoar:https://opendoar.ac.uk/repository/71602025-05-28T17:12:30.881774Repositórios Científicos de Acesso Aberto de Portugal (RCAAP) - FCCN, serviços digitais da FCT – Fundação para a Ciência e a Tecnologiafalse
dc.title.none.fl_str_mv Conflicts of Interest in the Underwriting of IPOs and Price Stabilization
title Conflicts of Interest in the Underwriting of IPOs and Price Stabilization
spellingShingle Conflicts of Interest in the Underwriting of IPOs and Price Stabilization
De Carvalho, Antonio Gledson
Universal Banking
Conflict of interest
Underwriting
IPO
Price stabilization
Aftermarket short covering
Partial adjustment
title_short Conflicts of Interest in the Underwriting of IPOs and Price Stabilization
title_full Conflicts of Interest in the Underwriting of IPOs and Price Stabilization
title_fullStr Conflicts of Interest in the Underwriting of IPOs and Price Stabilization
title_full_unstemmed Conflicts of Interest in the Underwriting of IPOs and Price Stabilization
title_sort Conflicts of Interest in the Underwriting of IPOs and Price Stabilization
author De Carvalho, Antonio Gledson
author_facet De Carvalho, Antonio Gledson
Amaro de Matos, João
Pinheiro, Douglas Beserra
De Sa Mello, Marcio
author_role author
author2 Amaro de Matos, João
Pinheiro, Douglas Beserra
De Sa Mello, Marcio
author2_role author
author
author
dc.contributor.none.fl_str_mv RUN
dc.contributor.author.fl_str_mv De Carvalho, Antonio Gledson
Amaro de Matos, João
Pinheiro, Douglas Beserra
De Sa Mello, Marcio
dc.subject.por.fl_str_mv Universal Banking
Conflict of interest
Underwriting
IPO
Price stabilization
Aftermarket short covering
Partial adjustment
topic Universal Banking
Conflict of interest
Underwriting
IPO
Price stabilization
Aftermarket short covering
Partial adjustment
description 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.
publishDate 2015
dc.date.none.fl_str_mv 2015-06
2015-06-01T00:00:00Z
2019-09-30T17:12:26Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10362/82746
url http://hdl.handle.net/10362/82746
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 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
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Nova SBE
publisher.none.fl_str_mv Nova SBE
dc.source.none.fl_str_mv reponame:Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
instname:FCCN, serviços digitais da FCT – Fundação para a Ciência e a Tecnologia
instacron:RCAAP
instname_str FCCN, serviços digitais da FCT – Fundação para a Ciência e a Tecnologia
instacron_str RCAAP
institution RCAAP
reponame_str Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
collection Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
repository.name.fl_str_mv Repositórios Científicos de Acesso Aberto de Portugal (RCAAP) - FCCN, serviços digitais da FCT – Fundação para a Ciência e a Tecnologia
repository.mail.fl_str_mv info@rcaap.pt
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