Hopefully this doesn&#x27;t border on the &quot;conspiracy theory&quot; side too closely, but if a company is able to IPO at 5x what they&#x27;re &quot;actually&quot; worth, the company still gets that cash, so what happens to the stock price after that doesn&#x27;t matter from the perspective of the company accountants.<p>A couple of examples:<p>Groupon:  IPOed at $20&#x2F;share, raising ~$700m.  They are currently trading in the $2.70 range.  From a company perspective, they killed it by IPO-ing -- they took $700m worth of cash, most of which I believe they still have (as of a few months ago they still had ~$1bn in cash equivalents).<p>Zynga: IPOed at $10&#x2F;share, raising roughly $1bn.  They are currently trading at $2.48.  Same basic story as above.  Their current market cap is just about double what they raised in cash at their IPO.<p>So from two perspectives, these companies did exceedingly well:  their investors and founders likely cashed out most of their chips at IPO, so they made a killing, and the company received a tremendous amount of cash for their coffers.  Sure, Groupon and Zynga booted their CEOs, but they don&#x27;t care much, and I&#x27;m sure whoever they got to replace them is handsomely compensated (regardless of how well they do).<p>So who gets screwed?  Employees, who don&#x27;t get to sell their shares until the company has tanked, and whichever investors are stuck holding the bag after IPO.  But after the IPO, there&#x27;s not much of an incentive for these early people to care about that;  if they get canned, who cares, they&#x27;ll cash out their $100m worth of compensation and go work at some other company down the street.