This was the same thing with Facebook. This is how the financial banks that prepared the IPO are making a lot of money easily and probably how Twilio negotiated a low price for the IPO.
Which makes me wonder... are there any safeguards in place to make sure that companies don't get ripped off? In would seem like it would be in the underwriters best interest to value the stocks at a very low price so they can make a lot of money from an IPO.