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Technology Stocks : WHICH ARE THE HOT IPOs?
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To: Tourist who wrote (25)7/2/1999 11:43:00 PM
From: Henry Volquardsen  Read Replies (1) of 33
 
for the underwriter it means they can't comment on the stock, which basically means no recommendations. When the quiet period ends you will frequently see the lead underwriters come out with their recommendations on the first day. It can be a bad sign if they don't. I'm not as clear what the restrictions are on the company itself but there are also limitations on what they can say.

I think the theory behind having a quiet period is to keep the underwriters from manipulating the market to place the stock. They have to put all the information relevant to the stock in the prospectus. The prospectus is filed with the SEC and is subject to all the appropriate disclosure rules etc. Recommendations aren't subject to the same scrutiny. Therefore the quiet period allows the stock to get placed based solely on the information in the prospectus and without any of the potential hype associated with analyst comments. At least that is the theory as I understand it.
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