These kinds of articles are seriously insulting to the leadership of the companies involved in the IPO. I seriously doubt that the board of LinkedIn would let themselves be scammed by a bank. If the article is true and this scam has been going on for years and LinkedIn allowed it to happen to their company then that would send me a signal not to invest. However, I think they knew the risks and choose a lower IPO to ensure upward price movement on the first day.
There are many ways to IPO (auction, etc) and you have to keep in mind that a big IPO pop makes everyone feel good about the stock. Yes, perhaps LinkedIn possibly could have made an extra $352 million, but if that strategy resulted a $70 IPO with no pop then they would have lost $1 billion in market cap. Pricing and seeing an upward trend have a big impact on the perception of value. Stocks are not priced according to some logical rational algorithm, it's about perception of value and big returns and amazing articles about how it doubled in value on it's first day help fuel those perceptions.
There are many ways to IPO (auction, etc) and you have to keep in mind that a big IPO pop makes everyone feel good about the stock. Yes, perhaps LinkedIn possibly could have made an extra $352 million, but if that strategy resulted a $70 IPO with no pop then they would have lost $1 billion in market cap. Pricing and seeing an upward trend have a big impact on the perception of value. Stocks are not priced according to some logical rational algorithm, it's about perception of value and big returns and amazing articles about how it doubled in value on it's first day help fuel those perceptions.