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(Revised from original 1999 version)
W. R. Hambrecht & Co: OpenIPO
OpenIPO is a new mechanism for pricing and distributing initial public offerings. The system, which is based on a Dutch auction, represents an attempt by the investment bank W.R. Hambrecht + Co. to change the manner in which IPOs are underwritten. The case provides a setting in which to discuss the existing set of institutional arrangements relating to the underwriting of IPOs, including the well-known phenomenon of the initial-day spike in price. Also provides a vehicle for discussing the informational efficiency of stock prices and the role of intermediaries and markets in providing investors with company-specific information. Can be used to talk about the issues raised by electronic trading and the distribution of securities over the Internet to relatively uninformed individuals.
Keywords: Investment Banking;
Initial Public Offering;
Agreements and Arrangements;
Perold, Andre F., and Gunjan D. Bhow. "W. R. Hambrecht & Co: OpenIPO." Harvard Business School Case 200-019, January 2000. (Revised from original October 1999 version.)