Today’s ZipCar IPO was underpriced, so the institutional investors—not ZipCar—made lots of money on the day’s gains:
ZipCar's underwriters, Goldman Sachs and JP Morgan, just screwed the company and its shareholders to the tune of an astounding $50 million.
How?
By wildly underpricing the deal and selling ZipCar's stock to institutional clients way too cheaply.
Google did it right, using an auction to set the IPO price of its shares. Why doesn’t everyone do it that way?
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