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"Etsy shares opened Thursday morning at $31 a share, almost twice their initial public offering price" WOW - sounds like the banks really mis-priced this IPO
by misiti3780 12y ago
"Etsy shares opened Thursday morning at $31 a share, almost twice their initial public offering price"
WOW - sounds like the banks really mis-priced this IPO
- eru 12y agoPricing IPOs is weird. You'd think they should go for an auction and just capture all the value. But for various silly reasons, IPOs are usually priced to `pop'. (It took me a while to work out why, and I'm still not convinced.)
- gtremper 12y agoDidn't Google use some sort of auction at their IPO? They're the only company I've heard doing something like that.
- adventured 12y agoThey used a modified dutch auction: http://www.forbes.com/2004/05/10/cx_aw_0510mondaymatchup.html http://www.forbes.com/2004/05/10/cx_aw_0510mondaymatchup.htm...
- falsestprophet 12y agoBulge bracket investment banks recommend you sell stock to them and their clients at a reduced price for N reasons. Not terribly surprising.
- s73v3r 12y agoYes. Although you do need a "pop", meaning you can't charge the actual value; you have to underprice it somewhat. If you pop, you get the news and the excitement that comes with launching on a high note. If you overprice, and shares tumble the first day, then you've pissed off the initial investors, and everyone else is scared to invest because of that initial tumble. It makes it much harder to get back to a decent standing.