Hot IPOs are intentionally underpriced, and the first-day gains go to the investment banks' best clients, who repay the banks with more business.

Drawn from what Bill Gurley said

What Bill Gurley actually said

Bill Gurley 3 Jun 2021 General partner at Benchmark Capital for over two decades

"Hot IPOs" are intentionally underpriced, and then the one-day gains are craftily handed to the very best customers of the investment banks. They return the favor by doing more banking business with said banks, and some of the windfall-money comes right back to the bank via other channels.

Where this was said

↗Customers Love Free Stuff … But That’s Not Your Problemabovethecrowd.com

3 Jun 2021

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