Those investors are given allocations based on how much the brokers like them, how much brokerage they pay, etc. The book build isn't done on the highest price,

Those investors are given allocations based on how much the brokers like them, how much brokerage they pay, etc. The book build isn't done on the highest price, that's the messed up part. If it was done on the highest price - then those investors who are buying after IPO would have put in bids in the IPO and there wouldn't be a pricing gap.