Ok, now I see what you're saying. However, it seems to me that every pre-IPO shareholder in every company has an incentive, from this argument, to push for a higher IPO price, while the bankers have an incentive to hold the price down. So what made Facebook unusual?
That aside, your point remains good for showing that my speculation is probably off, even though it doesn't in itself explain Facebook's trajectory.
I-Banker incentives are complicated. On the one hand, potential clients select among them based on their ability to generate wealth for the client (pushing IPO prices up). On the other hand, they have tremendous opportunity for self-dealing transactions (pushing the IPO price down). The balance is apparently in flux.
Facebook may have been unusual because Zuckerberg's particular special skills seem to resolve around analyzing and monetizing social interactions. Those skills may have helped him maneuver the I-bankers better than the average going-public entr...
Facebook IPO'd at a price of 38 dollars a share, which apparently gave it a price-to-earnings ratio in the range of 100 - extremely, fantastically high. The price dropped pretty rapidly and is currently somewhere around 20 dollars; which still, presumably, gives it a very high P/E ratio somewhere in the forties. Now, suppose it had IPO'd at a more historically-reasonable P/E of, say, 20 - still high, but not stratospheric. That would put the initial share price somewhere around 10 or 12 dollars. Is there any strong reason to believe that the price would then have *risen* to where it is now? It is not obvious to me that the current price is supported by anything but the historical price - in other words, it's trading around 20 because it has recently traded around 25.
My point: I can't help but wonder if someone connected to the IPO had read Kahneman on anchoring. Somebody, clearly, was buying the stock at 33, just as someone is still buying at 20; I wonder if the chain of thought had that apparently-arbitrary number "38" in it somewhere, making 33 look cheap - fundamentals be damned! And if this happened, who benefited, and what ought we to conclude about the efficiency of markets?