Typically, lead managers promote the stability of the share price once post-IPO trading starts. With the price manipulation permission from SEC, they might take a series of activities (e.g., post-IPO purchasing of shares) against the aftermarket bearish selling pressure.
Some literature also focuses on the profitability of lead manager’s market making behavior. Since lead managers are at an advantage in collecting information and placing shares, they can beat other investors acting as market maker.
Ellis et al. (2002) document that in Nasdaq because of the profitability of such activities, this making behavior in which the lead manager engages can last for a long time during the post-IPO period. It is opposite toward the situation in terms of the smaller IPOs. In that case, lead manager’s making behavior ends shortly after the IPO.