1. But the client is delighted.
- Author
-
Stern, Richard L. and Bartlett, Jr., Charles M.
- Subjects
STOCKS (Finance) ,FINANCE ,INVESTORS ,CORPORATIONS ,RATE of return - Abstract
This article analyzes why so many new stock issues perform so miserably in the U.S. Conflicting interests are in play when a new stock comes one's way. The issuing company, of course, wants the highest price possible. The investor wants the possibility of a decent return. In between is the underwriter, which all too often cannot afford to be a truly disinterested middle-man. If it doesn't price a new issue to the client's liking, the underwriter risks losing the offering to another firm that will. The performance of new stock issues, working with the unique database on new issues developed by Forbes in 1986, illustrates this bias clearly. INSET: `We figure out what makes sense' (discusses First Albany Corp....
- Published
- 1989