Cartoon man with a long nose that is going through the ears of another cartoon man

IPOs are a racket. But try finding something better.

Jay Ritter

“As privatisations spread, investment banks such as Goldman used a new technique called book-building to ramp up enthusiasm [for IPOs]. Rather than only tapping retail investors, they allocated blocks of shares to money managers such as Fidelity Investments, increasing the pool of capital available. Since then, the American IPO model has conquered the world,” writes The Economist. 

Cordell Eminent Scholar Chair Jay Ritter comments on how the underpricing of IPOs in America has left billions, yes, billions, on the table in this story from The Economist