An order by a managing underwriter to buy or sell a security immediately before a secondary offering of the same security. The managing underwriter makes a pre-syndicate bid in order to stabilize the price of the security, which will make the secondary offering easier to place with investors. Pre-syndicate bids are only permissible under certain, defined circumstances set forth in SEC Rule 10b-7.
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A stabilization bid prior to the effective date of a secondary offering.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.