[vipbunter]

A successful IPO, from a financing perspective, is defined by exactly what you said. An initial spike (I'm guessing up to $45 - $50, maybe higher) followed by a crash to $25 or so a week later.

So what happens?

- Zuckerberg and his cronies sell at the offer price of $38 to those who got in on the ground floor (basically the banks)
- The banks sell to the mob (mom and pop) at a rapidly escalating price ($40, $45, $50)
- Some early whales dump and jump, and over the next week the mom and pops get nervous and sell off. Price drops to $25
- Zuckerberg and his cronies buy back the stock at $25

I buy a cake for $2, sell it to you for $5 and then buy it back from you for $1. Greed is good...

Like this?

http://www.youtube.com/watch?v=WAynvmMoWaA

edit: damn that clip does not have the end on :/