Equity Dutch auctions were designed to democratize initial public offerings. In 2014, I founded @ARKInvest to help democratize investing in the innovation space. Despite best intentions, this week $U went public in a Dutch auction sponsored by $GS that we believe missed the mark.
Some of us who placed bids above the initial 40-44 indicated range, and then raised our bids above the revised 44-48 range, assuming that our bids would be filled, learned the hard way that we would receive nothing. Very few things surprise me in this business, but this one did.
Apparently, $GS introduced a Dutch auction twist that did not require it to inform those who had committed to a price above the “range” that the range had changed, unless the “indicated price range” had increased by 20%+. Excuse me?
I am sure that $GS disclosed this twist in many documents, but it never apprised us despite discussions with its sales traders of our clear desire to gain exposure to $U. Did $GS’s highest revenue generating customers get the word? I don’t want to be in that club. Just wondering.
.@GrousARK has done some of the most provocative and differentiated research on #gaming in the financial services industry. We are excited to share our forthcoming blogs and white papers during the next few months.
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