Underwriters band together, keep FB above 38. Market manipulation?

How do you know it was half rather than a third, three quarters or the entire amount?

Quote from krazykarl:

They spent half the shoe on Friday - you don't stand in front of a freight train.
More...
 
good info on the greenshoe. If I understand this correctly the firm has a free trade on that is used to "support" the IPO.

If the prices goes straight up (doubtful in any ipo), they can exercise and b/e on the trade due to greenshoe.

IF the stock falls they can close out their 15% short position and profit on the difference...
 
That is how it works. But you do have one thing wrong: Many IPOs have performed well enough that at various points in the cycle green shoes have generated very significant profits for underwriters.

Quote from jmoo:

good info on the greenshoe. If I understand this correctly the firm has a free trade on that is used to "support" the IPO.

If the prices goes straight up (doubtful in any ipo), they can exercise and b/e on the trade due to greenshoe.

IF the stock falls they can close out their 15% short position and profit on the difference...
More...
 
You must log in or register to reply here.
Back
Top