The pop in shares in LinkedIn following its initial public offering last week has prompted a heated debate over the tactics of the bankers that underwrote the offering and whether they deliberately underpriced to benefit their favoured clients.
Joe Nocera of the New York Times opined on Saturday that LinkedIn was “scammed by its bankers”:
The fact that the stock more than doubled on its first day of trading — something the investment bankers, with their fingers on the pulse of the market, absolutely must have known would happen — means that hundreds of millions of additional dollars that should have gone to LinkedIn wound up in the hands of investors that Morgan Stanley and Merrill Lynch wanted to do favours for.
Nocera was backed by Henry Blodget of Business Insider, prompting a back and forth with The Epicurian Dealmaker on whether they knew what they were talking about. The debate was summarised by Felix Salmon in this post. Read more