Prior research has assumed that underwriters post a stabilizing bid in the aftermarket, we find instead that aftermarket activities are less transparent and include stimulating demand through short covering and restricting supply by penalizing the flipping of shares. In more than half the IPOs,...

Although much attention has been paid to the price behavior of initial public offerings (IPOs), research related to the activities of underwriters in the aftermarket has been hampered by both lack of data and the limited transparency of industry practices. This paper uses a unique data set that...