So if I remember correctly, Morgan Stanley decided to increase the IPO at the 11th hour. Lots of concerns at the time that the growth wouldn’t support the valuation, but the problem was, the private equity market had already been completely invested and had driven up even higher than that. So do you let the market work and the private equity take a hit on their profits?

It seems like the choice was made to raise the IPO price to $38 per share which would give the private equity a chance to cash in from the public. To my math, $10 per share times 388M shares offered at the IPO is a pretty big number. ($3,880,000,000) The $5M penalty for undue influence is not much in comparison. The underwriting commission on an extra $3.8 Billion can probably cover the penalty.

The bigger problem to me is that there are really two markets now, the “pre-public” market for insiders, and the “public” market. The choice is really between two losing propositions. Do you invest at the private equity stage with none of the regulatory protection for investors, or do you wait and pay “full retail”, but at least have some laws intended to protect you?

My choice has been “none of the above”. I don’t see any alternative than letting others drive up prices, watching some people overpay, then waiting for the stock to find its real market price. I’d love to hear others opinions, maybe I’m missing something.