IPO Changes on Pricing Day

Summary

This practice note reviews the issues to be considered and the process involved when an issuer and its underwriters want to make changes to previously disclosed pricing information immediately before the pricing of an initial public offering (IPO), commonly referred to as upsizing or downsizing the offering. Underwriters often determine at the end of an IPO road show that investor demand has exceeded or fallen short of expectations at the time marketing of the offering commenced. At this point, there is usually a flurry of phone calls and emails to counsel regarding the rules and mechanics for upsizing or downsizing the offering (while getting everything accomplished as soon as possible so that the IPO can price and orders can be confirmed with accounts).