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Title:The Existence and Effectiveness of Price Support Activities in Germany: A Note PDF Logo
Authors:Oehler, Andreas
Rummer, Marco
Smith, Peter N.
Issue Date:2004
Series/Report no.:Bank- und Finanzwirtschaftliche Forschung: Diskussionsbeiträge des Lehrstuhls für Betriebswirtschaftslehre, insbesondere Finanzwirtschaft, Universität Bamberg 30
Abstract:The overallotment or greenshoe option has become very popular in the German IPO market since its introduction in 1995 and is nowadays an important tool to stabilize IPOs or to issue additional shares in the case of excess demand. Besides providing evidence for the prevalence of price support activities by the underwriter we show that the greenshoe option which seems to be used to support overpriced offerings in the secondary market is not very effective in propping up aftermarket prices. Additionally, the market seems to decide quite early which firms are ?losers? and which are ?winners? in terms of stock market performance.
Subjects:Initial Public Offerings (IPO)
Price Support
Overallotment Option
JEL:G12
G10
G32
G24
Document Type:Working Paper
Appears in Collections:Diskussionsbeiträge, Lst. f. BWL, insb. Finanzwirtschaft, Universität Bamberg

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