The investment banker and VC push stock prices into the stratosphere and the individual investor’s greed put him a precarious and jeopardizing his financial position for a massive shakeout during the new land grab. Investment banker setup IPOs. Investment bankers make their money by keeping the big clients happy. These investors control huge blocks of cash and use their financial power to bang on the bankers for big stakes in IPOs. Individuals jump for the IPO. “What whet the public appetite for these investments is the innate human tendency of wanting to get something without creating something.” During manias investors forge how much time it takes for a viable company to become established. The investment maniacs in the public market end up sacrificing the net worth for the sake of the industry. The rich sell of the initial investment in the IPO and pick clean the pockets of the average investor. “Theres a thinning of the herd, and the greedy lose their capital on behalf of the insiders.” By 1987, technology was considered an un invest able class by profession money managers for this exact reason – its unpredictability. Who profited from these IPOs? Earthweb sold 2.1 million shares a 27% stake on the first day, starting at $14/share and ended the day at $49.69, a 247% increase. TheGlobe offered 3.1 million shares at $19/share and at close ended $63.60, a 606% increase. In 1998, eBay went public at $18/share and in 7 weeks later the stock prices was at $174 a share and reached a market capitalization of $7 billion. The rich investors cleaned house. Ebay was turning 5 million shares a day. In 1998, IPO offerings jumped 70% in their first day. Marketwatch went public at $17/share and at the close finished at $80/share up 474%. Priceline offered 10 million shares at $16/share and ended at $81/share, a 331% increase. K-tel started at $4/share and jumped to $40/share and dropped back too $4/share from Apr 1998 through Oct 1998 then K-tel announced it would sell music on playboy and its stock jumped 93% the next few days with 20 million shares changing hands. 4 million shares belonged to Philip Kives and 8.3 million shares were available for trading and the price spiked despite the fact the company had 3 years of loses. [Learn More ...]

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