The underwriter of an IPO goes around and sells your stock to their largest clients in advance (which is where the company gets its payout). They sell your stock at say 10% less than what they think it will settle at. All the pre-IPO buyers cash out within the first few hours of trading. Without a big enough "pop" your stock is considered to have been a bad investment by the underwriters and the pre-IPO buyers because they didn't see 10%+ one day returns.
IPOs are layers upon layers of scams and shady dealings.
I think it's a fine line- I'm not in finance, but from what I understand you want some incentive to purchase a new issue as you have a set target of shares you're trying to move. I think that doubling in price is a bad thing, but I don't think movement of a few dollars per share is necessarily a bad thing.
IPOs are layers upon layers of scams and shady dealings.