[vasco]

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.

[ahepp]

This seems to be assuming the share price ends up at the same place. It's simply a question of whether the IPO should be priced lower or higher.

[vasco]

If you go by the efficient market hypothesis you would say that. I doubt that a universe where you open at $20 and rise by 100% gives you the same end state for all actors + price as a universe that opens at $200 and crashes by 80%. If you believe everything is priced in all the time I guess it makes sense.

[AmericanChopper]

The efficient market hypothesis doesn’t predict that everything is priced in all the time. It predicts that you can’t consistently beat the efficiency of market pricing over a long term. It doesn’t predict that short term volatility can’t exist.