It is certainly in the interest of the investment bankers (and their institutional clients) to maintain the status quo. The push for change needs to come from the managers of the companies going public. My guess is that most of them feel that they are at the mercy of their investment bankers, which is certainly true for the marginal offerings. LinkedIn could have insisted on a Dutch Auction, as can Zynga and Facebook.
According to Wikipedia, over 20 companies have gone public using the OpenIPO process:
WR Hambrecht + Co has used OpenIPO to take a number of companies public including Morningstar, Interactive Brokers Group, Overstock.com, Ravenswood Winery, Clean Energy Fuels, and, most notably, functioned as co-manager to take Google public in 2004, using the Dutch auction system. Many traditional investment banks have balked at the idea of using an auction process, such as OpenIPO to engage in public securities offerings as this new method allows for equal access to the allocation of shares and eliminates the “behind the scenes” dealings of shares and favorable treatment often found in conventional IPOs. Despite other banks’ resistance to using this method, however, OpenIPO has become more popular and has been used for over 20 public offerings.
en.wikipedia.org |
