Institutional investors dodge underwriters' monitoring to boost IPO allocations.
Institutional investors tend to hide their sell trades in the IPO market, especially in less popular IPOs and during the first month after the issue. They are more likely to sell through non-lead brokers to avoid detection by the main underwriters. This strategy helps them avoid penalties in future IPO allocations. Contrary to common belief, these investors are not just flipping their IPO allocations but breaking agreements with underwriters.