Tech IPOs Shut Out the Little Guy
With the merger market slowing down, IPOs -- particularly those in the tech sector -- are on their way back. But, as usual, there's a catch: They're back with a twist, one that's unlikely to serve the interests of most individual investors.
More and more, when big-name tech companies file to go public, the fine print includes terms that are favorable only for insiders.
These terms are completely legal, but they often leave the majority of voting power in the hands of founders or a parent company; they allow deep-pocketed investors to buy a chunk of the company at the last minute at a steep discount; and they often shovel a disconcerting portion of IPO proceeds to key investors.
In some ways it started innocently enough back in 2004, when
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