Tom AustinInteresting piece in today’s NY Times (and reprinted in the Boston Globe), recounting how Boston Beer’s Jim Koch bypassed the traditional IPO route in 1995 to offer stock in his company directly to consumers (http://www.nytimes.com/2012/02/19/your-money/an-ipo-process-that-is-customer-friendly.html?scp=1&sq=sam%20adams%20ipo&st=cse). [Disclosure: I own a small stock position in Boston Beer.]
Google did a similar thing in 2004 with its modified dutch auction IPO.
The beauty of these procedures is they take the investment bankers out of the role of determining who gets what (and who profits most, at least initially). Power to the overall market, not the institutional gate keepers, or so the thinking goes.
Which raises an interesting question. Facebook is “the people’s place”, going on a billion of them (us) already. So why shouldn’t Facebook use a similar procedure? That would elevate the IPO from a “cash in” event to a celebration of the hundreds of millions of users who could participate in the opening public investment round.
What do you think?
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1 Joan February 20, 2012 at 1:36 pm
Wouldn’t this be a great way to address the fact that Facebook’s revenue model is based on volunteer labor? We Facebook users who have helped create this enormously profitable company should be able to buy into its future at a preferred rate. After all, we’re the ones who helped make that future possible.