Price it too high and the news will report "Instagram opens -30% on their first day". Price it too low and you left money on the table.
The best approach would be allowing people to place buy orders on market and then just liquidate as many as you can stock for when market opens but I'm not sure if this is exactly how this will go.
Who cares if "instagram opens -30% on their first day"? As a company, your objective should be raising the capital you need at the least dilution, not burning money for the sake of some articles that everyone will forget in one week.
Who remembers what the pop or not was for <random ticker>? That's right, nobody.
Have you worked at a company that has gone public? It's a huge day for the company. Seeing the stock dip is a major morale killer, attributes to attrition, and can cause issues with hiring strong talent.
It's not the same, the company presumably still owns a lot of it's own stock post IPO, so a stronger share price will be way better for M&A for example, which is one of the many reasons a company may want to become publicly traded.
Seriously, how is this still going on when literal billions of $ on the line are being squandered to Wall St. every year in IPO's? Especially from tech co's where generally people should have a bit more critical thinking for the end result.
Bookmakers run pre-market. There is a period where you can bet much lower than usual stakes. The bookie sees which side the money is piling on and adjusts the odds before opening the main market.
This is the way to pay a premium for price discovery. Maybe something like that could be done with stocks.
Price it too high and the news will report "Instagram opens -30% on their first day". Price it too low and you left money on the table.
The best approach would be allowing people to place buy orders on market and then just liquidate as many as you can stock for when market opens but I'm not sure if this is exactly how this will go.