[robbiep]

This is not a new phenomenon though. Look at tech bubble #1. hell, go back in time and look at Tulip Mania or the railroad bubble in the late 19th century. Wall Street will continue to do what is in it's interest. With average returns from Underwriting an IPO in the range of 7-9% they have to. Wall Street doesn't care that mum and pop investors get screwed - they just need to know that there are more out there that will continue to buy IPOs if they are presented in the right way.

BTW, IPOs have been in long term decline (in terms of absolute numbers) for ~20 years now - see the economist

http://www.economist.com/node/21555552?zid=300&ah=e7b937...

[aniro]

The gist of that article is that the number of firms going public or using capital markets to raise equity has diminished in favor of private-equity, irrespective of the number of firms in existence.

Most of the reasoning behind it appears to be that the legal system has been modified in such fashion that it favors other forms of firm structure.

Hardly indicative of any natural decline, it would be easy to take from this article that the Pump & Dump style IPOs (and other massive erosions of trust) are strangling the effectiveness of Capital Markets by scaring away investors and inviting increased regulation.

[drumdance]

I think the dot com bubble was the most damaging. Prior to that IPOs were not something the average investor would try to get in to. First day "pops" were modest and the expectation was that a company (even a tech one) should have 8 quarters of steadily improving profits prior to the offering.