The new-issue market...is ruled by controlling stockholders and corporations, who can usually select the timing of offerings or, if the market looks unfavorable, can avoid an offering altogether. Understandably,these sellers are not going to offer any bargains...Indeed, ... selling shareholders are often motivated to unload only when they feel the market is overpaying.
--Warren Buffett's Chairman's Letter, in Berkshire Hathaway Report, quoted in Jonathan Shayne and Larry Soderquist, Inefficiency in the Market for Initial Public Offerings, Vanderbilt Law Review, 1995.
In other words, controlling stockholders have private information that indicates the true value of the company. They sell only when smaller shareholders are offering too much.