FT Alphaville " With Facebook, give thanks for greenshoes Posted by Paul Murphy on May 18 17:27. After an open of $42.05, against the $38 IPO price, Facebook stock quickly reverted to the sale price on Friday - at which level we presume those banks with the over-allotment mandate (MOST, JPM, GS) will have been very busy indeed. Quick explainer: This price support stabilisation system works by the banks allotting too many shares initially to clients buying into the IPO. If they have to support the market price when trading gets underway by buying stock, the banks are essentially covering their short position. On the other hand, if the IPO goes smoothly (price is up) they exercise an option for extra stock from the issue to cover the initial over-allotment. This entry was posted by Paul Murphy on Friday, May 18th, 2012 at 17:27 and is filed under Capital markets. Tagged with Facebook.