How tycoons' IPO 'losses' may hide profits at herd's expense

Tycoons are supposed to be smart. Yet, over 80 per cent of their investment in public offerings in the past four years is way below the offering price. How could they be that dumb?

Last week a good explanation arrived from the least expected source - the Hong Kong stock exchange.

In a guidance letter, the exchange said it "does not allow any direct or indirect benefits by side letter or otherwise, other than a guaranteed allocation of shares at the IPO price, to be given to cornerstone investors".

via Business feed http://www.scmp.com/business/article/1167458/how-tycoons-ipo-losses-may-hide-profits-herds-expense