The big news before Zipcar's initial public offering this morning was that the 12-year-old company still hadn't managed to turn a profit. Then when the stock surged upon hitting the market, the story shifted to how amazingly well the stock was doing. Now, with less than an hour left before the markets close, Henry Blodget has announced that Zipcar's IPO underwriters "screwed" the company out of $50 million.
Blodget's argument on Business Insider is that JP Morgan and Goldman Sachs, who underwrote the Zipcar debut, acted unconscionably by pricing the stock at $18 when they sold it to their institutional investors last night. That was the opening price, but within minutes it had soared to near $30.
The value of ZipCar-the-company, it seems safe to say, has not appreciated by 50% in the past 12 hours. And that means that, on its underwriters' advice, ZipCar sold its stock way too cheaply. It also means that the institutional investors who bought ZipCar's stock last night are high-fiving each other this morning, celebrating their instantaneous 50% gain. (Lots of them are probably also dumping some stock).
This article is from the archive of our partner The Wire.