Its main functions are: Underwriters within 30 days from the date of stock listing, can be timing according to the same issue price than the predetermined size of 15% (generally not more than 15%) of the shares. This function is reflected in the following: If the price of the issuer after the listing is lower than the issue of the IPO, the main underwriting of commercial pre-sale of stocks (pre-IPO funds), the price is not higher than the offer to buy from the two-tier market, and then allocated to the investors who submitted the oversubscribed application If the issuer's stock is priced above the IPO price, the principal underwriter requires the issuer to issue 15% of the shares and allocate it to the investor who made the pre-subscription application, and the additional IPO funds are owned by the issuer, and the additional shares are part of the number of the issuing shares. Obviously, the introduction of green shoe mechanism can play a role in stabilizing the stock price of new shares. Therefore, in the future for the use of green shoe mechanism of new shares, the date of the listing of 30 days, its rapid rise or fall in the phenomenon will be suppressed, the price fluctuations in the beginning of the listing will be somewhat convergent.
Green shoe Mechanism
