Consider the effect of this - effectively this is saying the company should put in a huge limit SELL limit order at the IPO price ("Limit SELL 100,000,000, @ $1

Consider the effect of this - effectively this is saying the company should put in a huge limit SELL limit order at the IPO price ("Limit SELL 100,000,000, @ $10.00") and leave it open all day. This would almost certainly bias the price movement on the stock downward because: 1) In order for the price to rise above $10.00, there would have to be enough buyers out there to fill the entire limit order. There's no guarantee of that. 2) Consequently, if the first few buyers start to trade their stock and the price falls below $10.00, the initial "IPO Limit Order" could never get filled. Essentially, the company does not know how much capital they would raise. The standard underwriting/IPO process aims to remove this risk. It's not really removed, however, and really just transferred to the underwriters. However, the underwriters have better ability to deal with/mitigate the risk because of their abilities in this area. (Gauging investor sentiment through roadshows, use of greenshoe/reverse greenshoe options, etc.) The idea is that the IPO price is set conservatively to ensure the underwriters don't take a loss. This "spread" between the IPO price and the "true" price is part of the fee they take. (I'm not arguing whether it's a lot of money, just providing the details) The key part of this is that it's hard to know what the "true" price will be on IPO day, and hence, what your IPO price should be. It's the underwriters' job to help determine this. Note that in your example, you could just set the IPO/Limit price so low that you know the entire sell order will get filled. But this naturally leads to the question: What should I set the IPO price to, to ensure the most amount of capital ("don't leave any money on the table") while still ensuring the order is filled? Again, this is a service that the underwriters would provide and is something that most companies probably don't know how to do. (Note that the situation in (1) and (2) is also why you would never want to put in a huge standing limit order; it will push the price away from you and effectively acts as an option for other traders to "lean on")