Your bank will get a ton of orders from institutional investors of how many shares they want at a given price. You will have a preference as to which investors you want on your cap table. Almost all of those investors value your stock less than the "pop price" (which includes the investors you want on your cap table). So you'll need to target the IPO below the "pop price" so you get them on your cap table.

You're probably picking investors based on how likely they'll let you stay on the board / CEO and if you think they're just going to dump the stock during the IPO (which would be bad for it's price).

So (unlike the SpaceX IPO) you're going to sell relatively little shares to retail who will buy at any price which during the opening days will cause it to spike as the demand (in nominal dollars) per share is beyond the IPO price target.

> but is the share price returning to IPO opening not just a sign that the banks accurately estimated something?

Sure they estimated something. But there's a ton of different things that can be estimated.

Ideally priced from the perspective of pre-IPO investors.

This seems like an argument for outside investors not to buy IPO stock.

Look at the financials and the price, and you as an individual get to determine if it's worth buying (or selling).

What is so controversial about saying that SpaceX seems overpriced?

Nobody said anything about fairness or duty.

My point was that if the seller is trying to maximize its self-interest by maximizing the IPO price, leaving no room for growth after IPO, then buyers probably want to take a pass at that price.

Surely you understand it's inverse of an IPO that jumps after intro, right?

SpaceX is not seen by investors as worth its price. This is because it is not.

I mean who knows where it will end up by the end of the year. Meme-stock-hype train could continue or it could reasonably crash far further back down to earth.