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What if the bankers get pissed off and sabotage it by not working hard enough to sell the issue. Have things become so bad that companies must ingratiate thems
by iwwr 15y ago
What if the bankers get pissed off and sabotage it by not working hard enough to sell the issue.
Have things become so bad that companies must ingratiate themselves with 40-50% tributes to the banks?
- michaelochurch 15y agoHave things become so bad that companies must ingratiate themselves with 40-50% tributes to the banks? I hate investment wankers with a passion and would love to see the people involved in IPO spinning get the Paris 1793 treatment. But the "40-50% tribute" claim is not correct. LinkedIn only offered about 7% of its stock, so it was only a 3-4% tribute. Knowing how scummy banks are surrounding IPOs, this was a very intelligent strategy. Now the stock can trade to a fair level and then they can do a secondary offering at a real price.
- hristov 15y agoI think the grandparent was referring to the theory that bankers may intentionally underprice the issue so that they could extract some of the benefit from the underpricing. So for example, in the case of LinkedIn, the theory is that the bankers knew that the shares could go for 100% higher price than the IPO price and sold those shares to their buddies at a much lower price with the understanding that their buddies would pay them back a percentage of the money they make flipping the shares by doing various other business with the banks. Of course none of this is proven, but it is a theory many serious people have.