Document Type



This article investigates the preferential allocation, or “spinning,” of shares in initial public offerings. It begins by examining the offering process and the incentives of underwriters, issuers, and investors. Through this examination of the participants and the process, it locates the harm of spinning in the underpricing of initial public offerings. The article then seeks to identify precisely which participants in the offering process are harmed by the practice and finally evaluates the most appropriate means of addressing this harm.

Date of Authorship for this Version

February 2004