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I think most people don't understand that if your prices shoot up so high that means your bankers underpriced it too much and their clients made a boatload and
by brianbreslin 9y ago
I think most people don't understand that if your prices shoot up so high that means your bankers underpriced it too much and their clients made a boatload and the company missed out.
- MrFantastic 9y agoI've been saying this for years. Banker's should be sued for negligence. The other misunderstanding is that a company splitting shares doesn't increase the value of your position.
- deleted 9y ago[deleted]
- Aunche 9y agoOr it's possible that speculators are driving up the stock to an absurd valuation. Honestly, I trust investment bankers over the FOMO investors willing to pay $29 a share.
- maxerickson 9y agoThey only sold ~10% of the company. So pre-IPO shareholders still get most of the upside. $250 million to the float, $2.2 billion to the rest of the shareholders. It can still be a mispricing, but it isn't so drastically painful if you look at it that way.
- discodave 9y agoYou could argue that the existing shareholders, who own 90% of the stock are better served in the long run if the stock has positive momentum. The calculation for if it's better to sell the other 90% into a hot market would be: 40% of 10% is only 4%. So if the initial pop has a long term positive impact of 4.4% on the price, then the existing shareholders come out ahead. It's debatable, but I think there are two sides.
- deleted 9y ago[deleted]
- regulation_d 9y agoA sizable first day pop can be good for a number of reasons, not the least of which is publicity. 40% is obviously excessive, but there are reasons to leave a little money on the table.