Insight - Airbnb, DoorDash broke IPO market – here’s a fix

Stocks soar: Traders work on the floor of NYSE during the DoorDash IPO. DoorDash soared in its trading day debut, rallying 86% from the IPO price. — AP

THE incredible first-day action in the stock prices of recent technology IPOs – particularly DoorDash Inc and Airbnb last week – has reignited a debate that goes back to the dot-com era over whether the process is broken.

Critics are blaming bankers for vastly mispricing the offerings, resulting in companies’ missing out on money they could have pocketed at a higher valuation. There’s something to that, but it’s not just about pricing. In fact, there is a simple solution that can bring better results for all stakeholders. And it explains why two promising initial public offering (IPO) candidates have now pressed pause on their plans.