Salon IPO Invites Investors Who Have Dutch Courage

Let's say you hear of a Wall Street stock offering involving a money-losing Internet start-up company in a conventional, low-margin business -- like publishing or retailing. If you're a late-'90's, late-bull-market investor, you'll probably leap for the phone (or should we say mouse?), place an order for 1,000 shares with your broker (or the virtual equivalent thereof), then start figuring out how you'll spend the money when your shares leap from $20 to $100 in the first few minutes of trading.

But would you do this -- that is, spend your hard-earned money for stock in a money-losing company that might never make a dime of profit for as far into the future as the mind of Man can see -- if the deal were structured in a way so as almost to guarantee that the shares you buy won't budge once you buy them?

That's the question now being posed by the planned initial public offering for Salon magazine, an Internet publishing operation. Salon is being taken public in a highly unusual form of offering known as a "Dutch auction." As a result, it will be almost impossible for speculators and daytraders to make a quick killing on the shares. ...