Even as Zynga slides, bankers reap big fees

by sajid on 12/19/2011, 6:11 PM with 15 comments
  • by jmvoodoo on 12/19/2011, 6:59 PM

    The bankers work for Zynga in this case, and it seems like they did a good job for their client by selling a large # of shares at above market.

    The fund managers, on the other hand, did a horrible job for their clients here.

  • by mathattack on 12/19/2011, 8:16 PM

    The banks have two sets of clients to appeal to. The Investment Bankers have corporate clients to keep happy. In 2000 companies were happy for the big 2x IPO day pops. Now they realize this is very expensive PR. On the other hand, their Institutional Sales has to keep all the Mutual Funds happy. Fidelity will forgive one misplaced IPO, but not a stream of them. If a bank can't sell to mutual funds, they won't get new mandates from corporations. Banks have to walk a thin line to keep both sides happy. (Of course they get paid well when they do it right)

  • by hamidpalo on 12/19/2011, 9:37 PM

    Underwriting fees are irrelevant. Every single firm charges the same, indicating that they compete on other things. Most of their IPO profit comes from quid-pro-quos with preferred investors to whom they allocate shares.

    Check out some of the links on this page: http://bear.warrington.ufl.edu/ritter/ipolink.htm

  • by jemfinch on 12/19/2011, 9:10 PM

    How can a journalist write an entire article about the stock price of company without stating its stock ticker symbol, ZNGA? It's a little ridiculous that I had to go to wikipedia to find that out.

  • by simonw on 12/19/2011, 7:39 PM

    I'd be surprised if Morgan Stanley think of $10.4 million as anything more than a rounding error.