Humanigen Inc (HGENQ)

[Corundum]

I don't think the underwriter will dump any shares that they may buy. If they did that, their reputation would be ruined. Their investors who bought higher than what they are selling for would be pissed, either directly at them for selling (if they know it's them) or indirectly because they were sold "bad merchandise" that is now worth less. Companies selling stock would become aware of the dumping and know they were betrayed by the underwriter. So the underwriter loses its customers on the selling side and it loses potential customers wanting to sell stock. Talk about killing your own business!

What they want is shares that they can sell at a higher price, so that they get both the commissions and the extra margin. To do that, they wait for orders at higher prices, then buy these extra shares to sell to them. Otherwise, they don't buy the shares and destroy their business. Also, why would they buy just to turn around and sell for lower prices at a loss?