The overallotment option (OAO) gives underwriters the right to acquire additional shares from the issuing firm at the offer price (less underwriting fees) in order to meet any excess demand for an issue. Thus, underwriters can use overallotment options to stabilize market prices post-issue by...

This paper examines the role of multiple lead underwriters (MLUs) in pricing initial public offerings (IPOs) by considering certification and market power hypotheses. Consistent with the notion that MLUs provide certification to the issue, we find that IPOs backed by MLUs price the offer closer...

We use textual analysis techniques to examine how the size of IPO lead underwriting syndicate influences the information production decisions of underwriters. Our results show that IPO prospectuses produced by multiple lead underwriters (MLUs) contain more informative content and use more...