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Saturday, May 05, 2012

#398: IPO Low-ball Pricing

I hate when companies price their IPO lower than they could get on the market, just so they can have the "glory" of a big first day pop in the market.  The stupid thing is that the main point of the IPO is to raise money for the organization and pricing the shares lower than they could get just enriches their friend who buy at the lower price and then immediately sell.  Of course, the fat cat insiders don't care since they have their shares already and they are locked up for a while.  A first-day pop should be seen as a failure in that the company did not get all the funds it could have gotten.  The recent lowering of the IPO for the Carlyle Group is what get me going on this one (even though in this case, looks like they made the right decision to lower the price, but it's a common practice.  Severity: 2


Vicki Stockton said...

I like your new format -- so much fancier! I aspire to have 600+ "hate" blogs like you some day. So little time, so much hatred :)

p.s. I did not scroll through all 600 of your annoyances, but I suspect that the little sideways smiley face as depicted above MAY appear here somewhere...

Vicki Stockton said...

Ooops. I meant to say 300+ annoyances.