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People have been buying and selling stocks for many years. If you look back to when stocks were first traded, you would see that most people that delved into the stock market were the very rich, high class people. As time has passed more people have invested in the stock market, whether they have traded stocks themselves, paid someone to do it or simply invested in mutual funds and “let it ride.” Nonetheless, more people of different income levels have invested in the stock market by some means or another. Now let’s look at an even bigger chance for the “less rich” to get vested in a company from the ground floor, how could the “average Joe” accomplish that?
IPO auctioning is becoming a more prominent option for companies to take their business public. It is still not a “preferred” method or even highly used, but it is out there, more visible than in the past. Google was probably the highest visibility company that used IPO auctioning as a way to get investors. According to Steven Syre of the Boston Globe, “Auction IPOs became the talk of the market last year [2004] when Google Inc. used the technique for its wildly popular public stock offering.”
I won’t say IPO auctioning started with Google, but it was probably the spark that made people notice how successful it could be. About a year later a company based out of Chicago, called Morningstar Inc. went public with an online auction. It wasn’t as successful as Google, but the stock is still doing well. It would seem that IPO auctioning is possibly a wave of the future, much to the dismay of investment banks, which stand to lose a very large sum of money if it becomes common-place.
If new co ...