Why would a company agree to be "IPO'd" for such a low price? Doesn't the company and its shareholders need to accept some blame here?
Fair enough that the bankers may have nefarious intent and they shouldn't get away with it but agreeing to such a shitty deal out of ignorance is pretty stupid.
One of the reasons the company is taking on these underwriters of the IPO is because they don't actually know how much the company is going to be valued at in the market? GS would be in a way better position with their experience to know this.
If they didn't play both sides of this market it would be in their interest to price is as accurately as possible.
Should not the company hire some kind of professional(s) who will observe both sides(mostly the bank) and provide objective feedback? It seems like they were jumping into unknown territory without any knowledge.
I really can't believe all companies go IPO blind like I get impression from the article.
Most companies think they are hiring those professionals when they go with GS. Forcing GS to state very clearly that they do not have any fiduciary responsibility to their clients is kind of a bfd.
Look at these cases; there's a lot of guesswork, it's not rocket science. If you have no clue what your business is worth, and are deferring completely to a third party, why are you even going public?
Comments
Why would a company agree to be "IPO'd" for such a low price? Doesn't the company and its shareholders need to accept some blame here?
Fair enough that the bankers may have nefarious intent and they shouldn't get away with it but agreeing to such a shitty deal out of ignorance is pretty stupid.
One of the reasons the company is taking on these underwriters of the IPO is because they don't actually know how much the company is going to be valued at in the market? GS would be in a way better position with their experience to know this.
If they didn't play both sides of this market it would be in their interest to price is as accurately as possible.
Should not the company hire some kind of professional(s) who will observe both sides(mostly the bank) and provide objective feedback? It seems like they were jumping into unknown territory without any knowledge. I really can't believe all companies go IPO blind like I get impression from the article.
Most companies think they are hiring those professionals when they go with GS. Forcing GS to state very clearly that they do not have any fiduciary responsibility to their clients is kind of a bfd.
I'm with you.
Look at these cases; there's a lot of guesswork, it's not rocket science. If you have no clue what your business is worth, and are deferring completely to a third party, why are you even going public?
The public is who decides what a publicly-traded business is worth.