Forget Raising Capital; Block Trades Rule

Tunick, Britt Erica
January 2005
Investment Dealers' Digest;1/24/2005, Vol. 71 Issue 3, p7
Trade Publication
The article discusses issues related to practice of block trading in the field of securities underwriting. As underwriting struggles to make a comeback, a bigger portion of what is considered underwriting for league- table purposes has nothing to do with raising capital. In block trades, underwriters agree to sell a large block of a company's stock, buying it at a slight discount to the market price in exchange for the risk they're taking until they unload it in the market. Even though no new equity is being raised, block trades of shares that have never been traded publicly must be registered with the Securities and Exchange Commission.


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