Say you are a broker allocating shares in an oversubscribed IPO, should you:
- allocate the shares based on the number of person ordering
- allocate the shares based on the order size
And what is your rationale?
My take so far:
- Individuals can take advantage by inflating their order size if the allocation is based on order size.
- Individuals can place many orders on behalf of many clients account to take advantage of the even allocation between number of person ordering.