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Couldn't such an auction be performed entirely online? An online dutch auction where institutional and retail investors can buy shares in an online live auction? There might be some technical hurdles to solve to ensure everybody is updated while the auction is running but this would at least reduce the liquidity problem for these auctions.

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Yes, however I think the hard part is getting the attention and interest of the investors in the first place. The IBs also act as a quality signal in the other direction, too. That is, I, as a potential investor am more likely to invest if the deal is brought to me by Morgan Stanley than if presented on some startup platform. I'm not passing judgement on that mindset, I'm just pointing out that it is the case for a large percentage of those potential investors.

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