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You're right on what it means, but not why. This is the reason IPOs work the way they do, with investment banks underwriting it. They get a large profit (poten
by encoderer 14y ago
You're right on what it means, but not why.
This is the reason IPOs work the way they do, with investment banks underwriting it. They get a large profit (potentially huge profit) in exchange for providing the services of a market-maker in the stock at $38/share.
There was nothing nefarious, just market making.
- joering2 14y agoI see what you are saying, but don't you agree: hadn't not demand got burned out quickly and drew the price down, they wouldn't have had to put a large buy order at $38. I mean, do you really believe they were offering $300MM of stock ready to sell on an "open action". They would all shit their pants if someone would have actually execute that. No, what they did was not illegal, But yes, what they did was unethical and anyone knowing anything about trading will take it as a negative sign in terms of this stock's performance.