Who do the company's financial executives serve during an IPO, when the identity of the investors is changing fast? Let's not forget that the point of an IPO i

Who do the company's financial executives serve during an IPO, when the identity of the investors is changing fast? Let's not forget that the point of an IPO is to (a) provide an exit for the startup investors. (b) raise funds for the company's future operations (c) make the company's financial executives and founders rich. Who loses when the offering price is lowballed? Everybody who sold shares into the offering. That's the first two of my list. Usually the insiders have a six-month lockup; usually they can't sell their own shares until six months after the IPO. So, if the shares hold their price the execs will do well. There's a big PR penalty if the stock drops below the opening price. That will turn into a money penalty on the execs in six months unless the company can overcome it. So, the smart bet for self-interested execs is to lowball the offering price. As long as the startup investors don't call foul, the only loser is the company itself. If I were an investor, I'd insist on the execs giving me (selling me cheap) options to buy half their shares at the opening price, as an incentive for them to price the offering right.