Tech IPOs are being badly mispriced, as Lemonade and Agora double in market debuts

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Lemonade more than doubled in value in its first day of trading on Thursday, a week after Chinese software company Agora did the same.

Tech IPOs have long been criticized for a process that lets investment bankers hand over underpriced stock to large public money managers, who often enjoy immediate and massive pops before ordinary investors are able to participate. Meanwhile, the issuing company ends up raising far less money than it could.

"They are ignoring demand when they price. On purpose," said venture capitalist Bill Gurley of Benchmark, in a text message. "This problem is systematic. Because the system is broken." In a video interview last week following Agora's IPO, CEO Tony Zhao told CNBC that the "roadshow went well," and that he got good feedback from 30 to 40 different investor groups. Zhao participated in meetings from China while Chief Operating Officer Reggie Yativ joined from Silicon Valley, where the company also has a big presence.

 

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$LMND/Goldman didn't misprice IPO. Gotta look beyond day 1. Clear it'd be a hot deal, but not clear what it's worth. A fast-growing but unprofitable insurer it could easily be valued more like a fin and less like a tech. Same as what happened to $LC and $ONDK (which both popped)

'Tech IPOs are being badly mispriced' says journalist who missed their ticket to the moon!

who cares? only up up up!!! federalreserve has killed all market volatility for stonks!!!

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Shares of digital insurance company Lemonade more than double in public debutShares of Lemonade, an insurance startup, soared more than 102% in its Thursday market debut.
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