[ryw90]

Google used a Dutch auction in their IPO. But then again they are pretty obsessed with auctions. There is some research on auctions for IPOs, e.g. http://www.nber.org/papers/w16214, that suggests they are too complex for investors.

[vessenes]

I remember the google IPO well; I had resolved to only do trades my advisor liked at the time (I was 25 or so and well meaning, really!)

The street hated Google's Dutch auction, and refused to push it to retail investors; a very unusual move at the time. The IPO estimates were at one point over $100, but if I recall correctly, the auction dropped down into the $80s, at which point at least one of the VCs pulled out of the IPO completely, preferring to hold their shares.

Anyway, despite these incredibly bullish indicators, my advisor didn't like the IPO.

It was very complicated to participate in too; you couldn't go through your normal channels. I think the complexity would be easily manageable by a modern UI/UX pro; the underlying market mechanics aren't that difficult. But hitting '90s era UI/UX with unwilling brokers was a tall order.

[jzwinck]

I'm having a hard time parsing some of what you wrote at the end there. First, Google's IPO was in 2004, not the 90's, and e.g. E-Trade was very well established and not so different from today. In any case I don't see what UI/UX have to do with it.

[evanpw]

And Google still had a 15% first-day pop, which is just about the normal size for a traditional bank-run IPO.

[remarkEon]

"Academics have found that I.P.O. underpricing is ubiquitous. Jay Ritter has documented underpricing over the years. According to Professor Ritter, the average underpricing for I.P.O.’s in the United States was 14.8 percent from 1990 to 1998, 51.4 percent from 1999 to 2000 and 12.1percent from 2001 to 2009."

"Over the last 50 years, I.P.O.’s in the United States have been underpriced by 16.8 percent on average. This translates to more than $125 billion that companies have left on the table in the last 20 years."

Normal over the last 50 years, maybe.

http://dealbook.nytimes.com/2011/05/27/why-i-p-o-s-get-under...

[chillydawg]

It absolutely it not normal. If there was ALWAYS a 15% pop, then IPO prices would be 15% higher.

[tveita]

It's not a given that a stock that just popped 15% trades the same as a stock that was offered at a 15% higher price in the first place.

[s73v3r]

No, because you absolutely want that pop, so you get positive press. The last thing you want is an IPO where the price goes down

[huac]

Google weren't that happy with how the auction IPO turned out, actually. Their second offering a year later followed Wall Street convention.