Goldman Sachs would like to buy 50 shares for $14 each. Morgan Stanley would like to buy 50 shares for $15 each. Barclays would like to buy 50 shares for $16 each.
Citizen Bob would like to buy 5 shares for $24 each.
So what happens? HarryCo IPOs at $15 (the maximum I can get to cover all 100 shares) and then immediately pops to $24 when Bob buys 5 shares from Morgan Stanley.
I did not leave $900 "on the table" in my IPO because there wasn't enough demand to sell 100 shares at $24.
If we assume that GS and MS have a reserve price of 24, as evidenced by the market open, then their strategic 15 and 16 bids do represent money left on the table.
> And then immediately crashes back to $16 because there are no other buyers willing to buy at $24.
Which obviously didn't happen.
But I think that's not always a great assumption, because sometimes things happen that don't affect firm fundamentals (profit, revenues, margins) but do affect valuation, like changes in interest rates, shifting investor sentiment on the sector, a lighthouse investor publicly stating their intention to buy/sell, etc -- all of these things change market cap without altering the business per se.
All this to say, I think the simple CAP=SHARES*PRICE formula is too simplistic. I think it's more accurate to think in terms of ranges of what the firm's equity might be worth, and realize that it's a highly subjective assessment based more on aggregate opinion, than some hard objective law of physics.
Yes, market cap should be independent of number of shares, and the market cap = # of shares * $ per share formula still holds, which is why many prefer to think about market caps rather than accounting units.
But it's also the case that a firm issuing a share for the price of $15, increases book value of the firm by $15, and this directly offsets the resulting shareholder dilution. Arguing it was impossible to find buyers at 24 dollars a share is a bit silly, given that the market immediately did just that.