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View Diary: Goldman Sachs & Bain Capital are in Deep Pooh Pooh This Time? (61 comments)

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  •  again...I am not commenting... (0+ / 0-)

    on the fact pattern of your specific case.  However, unless this IPO was one in a million, I am positive the dollar value of the underwriters commission and the selling concession were not set until the offering price was determined.  

    There are always indications of interest to purchase a stock at a higher price.  So what?  

    The share price is, in my considerable experience,  set by figuring out how much demand there is for an offering, taking into consideration at what price you can generate significant follow-on demand, and then estimating what the fully distributed trading price is likely to be.   That is, the price the stock is expected to trade at when the offering process is fully resolved.   I use words like "estimating" and "likely" intentionally because you are discovering a price for something that has never had a price before.  Hence an art, not a science.

    Now of course "spinning" and other nasty things took place, and are now forbidden.  I am just trying to inform this group what a typical IPO process is like, and specifically why offerings are sometimes priced well below where they may trade the first day.

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