Question

Usually, there is money left on the table with IPOs. Snapchat went public 3/2/17 at a...

Usually, there is money left on the table with IPOs. Snapchat went public 3/2/17 at a price to the public of $17 per share. How much money was left on the table?

Considering investors, the company, and the investment banker, who is happy about the money left on the table and who is not happy. Explain.

Has the price per share gone up or down since the IPO?

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Answer #1

The money left on the table is defined as the difference between the closing price on the first day of trading and the offer price multiplied by number of shares.

IPO = $17
Number of shares = 200 million
Closing price on day 1 = $24.48
Hence money left on the table = (24.48-17)*200 mn= $1,496 millions

The investor are happy as they benefit largely, the company is not happy as it could have sold for more. Investment bankers are at a loss because they could have asked for a greater fee had they calculated the correct price

The price has gone down considerably to $ 13.56 as on last closing day

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