Laddering

The promotion of inflated pre-IPO prices for the sake of obtaining a greater allotment of the offering. Laddering is an illegal IPO practice in which the underwriter engages in the sale of IPO shares to clients with the implicit agreement that more shares will be purchased post IPO, leading to big gains for both parties. Once the price increases a certain level, "insiders" then sell their shares and take their profits.

An underwriter will push up the issue price of an IPO through promotion, in order to please the issuer and secure a larger allotment. By agreeing to allocate additional shares to choice clients, the underwriter and clients can make big gains on the IPO shares, while the firm offering shares in the IPO are happy with the underwriter for creating increased market value.


Investment dictionary. . 2012.

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  • laddering — noun ( s) : ladders or material for ladders …   Useful english dictionary

  • DNA laddering — (left) visualised in an agarose gel by ethidium bromide staining. A 1 kb marker (middle) and control DNA (right) are included. DNA laddering is a phenomenon seen in laboratory tests; it is a sensitive indicator of programmed cell death …   Wikipedia

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