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Comment by hypeatei | Hacker News Reader

So I take it you're going to buy shares of OpenAI on opening day then? ;)

Institutions merely owning a newly-IPO'd stock means nothing. They get access to shares at a reasonable price before opening while retail is buying at insane prices after open. See Figma as an example where institutional investors got it at $33/share and it ended the IPO day at $115/share with retail buying all the way up (including pops above that at like $127)

I thought it was common knowledge that IPOs are a way for insiders and early investors (not IPO flippers) to get a nice exit during the frenzy.

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> So I take it you're going to buy shares of OpenAI on opening day then? ;)

Probably not. Do you understand however that your comment does not make sense in the context of my comment?

> Institutions merely owning a newly-IPO'd stock means nothing. They get access to shares at a reasonable price before opening while retail is buying at insane prices after open. See Figma as an example where institutional investors got it at $33/share and it ended the IPO day at $115/share with retail buying all the way up (including pops above that at like $127)

It also doesn't mean nothing - you have to go and analyze any given stock to make these kinds of claims on a per-IPO/equity basis. You also are ignoring traders and trading algorithms run by... big institutions and trading firms, and you're not accounting for volume or accounting for post-IPO purchases nor breaking those down by segment. In other words, you're just making stuff up.

Insiders get the best price before retail. What is there not to understand?

I understand that, but what I'm not understanding is why this seems to be a concern. I suppose equity given to early employees is a problem too and they're just "dumping their bags on retail" after their lockup period expires?

Earlier stage investors take risk and are rewarded for that. Most companies go bankrupt and folks lose their principal. For the companies that are successful yea some go bust after IPO - so what? Are you against public markets or something? That would at least be an interesting discussion.

Google IPO'd in 2004 and returned from what I'm reading about 6,500% after IPO (and this was in 2024, so the gains have gone up much higher since then) and all of that was the bags dumped on retail. If someone wants to dump their 6,500% return on me I'll take them up on that all day every day and twice on Sunday.

Being cynical is a recipe for poverty.

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