The institutions that bought the Zipcar stock last night are now 50% richer, just by virtue of being good clients of Goldman Sachs and JP Morgan. And that money came right out of the pockets of Zipcar and the Zipcar investors who sold on the deal.Blodget doesn't really mince words, in what he thinks is really going on (emphasis mine): "If Zipcar can sustain a price of $27 a share this morning, Goldman and Morgan should have sold it to institutions at $23-$24. [at the writing of this article, Zipcar shares were at $26.50] Because the stock was instead sold at $18, Zipcar and Zipcar's existing investors just got screwed by Goldman Sachs and Morgan Stanley to the tune of $50 million. That is an outrageous price. And the windfall accrued to the huge institutional clients of Goldman Sachs and JP Morgan. And don't think that Goldman or Morgan is going to let those clients forget it." Not being a finance lawyer or SEC regulator myself, I have no way of knowing if there is any way to prove that shady dealings were involved in Zipcar's IPO. But, If I were Zipcar's CEO (or any of the company's other pre-IPO investors), April 15th would have had me asking my lawyers some very serious questions about this transaction. At a minimum, it certainly seems that IPOs are one more area of finance that needs to be more closely scrutinized, and, perhaps, more tightly regulated. ------- Steve Puma is Director of Business Development for SABA Motors, and a sustainability writer/consultant. His work focuses (mostly) on clean transportation, including Plug-In Electric Vehicles, something he is very passionate about. Steve holds an MBA in Sustainable Management from Presidio Graduate School and a BA in Computer Science from Rutgers University. You can learn more about Steve by reading his blog, or following his tweets.
<em><a href="mailto:email@example.com">Steve Puma</a> is a sustainable business consultant and writer.
Steve holds an MBA in Sustainable Management from <a href="http://www.presidioedu.org/">Presidio Graduate School</a> and a BA in Computer Science from <a href="http://www.cs.rutgers.edu/">Rutgers University</a>. You can learn more about Steve by reading his <a href="http://www.brightpuma.com">blog</a>, or following his<a href="http://twitter.com/stevepuma"> tweets</a>.</em>