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Comment by Nelkins | Hacker News Reader

As someone whose main exposure to stocks is investing via retirement accounts, can someone explain if they're really leaving $4 billion on the table? Can't they just issue/sell more stock to drive down the price to their originally targeted price? Or is that some kind of breach of fiduciary duty (or something else)?

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Yes, the company can do a secondary offering after its IPO, and it's pretty common. I think the hype around the IPO will help them do a secondary next year, so in that sense the low initial price is like a marketing tool for future stock.

Also, Airbnb (like other tech companies) is issuing quite a lot of new stock in the form of RSUs used to pay employees. This constant dilution benefits from the high stock price.

You don't leave billions on the table to generate hype. You could just as easily raise the extra billions in the IPO and then spend $100 million in ads to generate hype (and it would be much cheaper).

They sold X number of shares in the IPO at at $68 per share price and then the next morning, shares were selling at >$130 per share. The money left on the table is due to them selling at $68 when they likely could have sold for high (given the pent up demand).

Some people argue that they wouldn't have been able to sell all X shares at $130 per share. That may be the case, but it's really hard not to think the $68 price was way too low.

You can issue more shares to raise more money and drive the price down, but you never can undo the discount you gave the IPO investors.

When they issued shares in the IPO, that diluted existing shareholders. The only way to un-dilute them would be to buy back those shares (at current inflated prices). They could sell more shares, which would mean further dilution.

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