[shaqbert]

The bigger question is why it has come to that, that door #1 is such a joke.

Is competition not supposed to drive down the bargaining power of the investment banks in terms of fees and IPO discount? Apparently not.

Are institutional investors who are part of the 30x oversubscribed and not getting allocations not really upset with this process as well? Why would they not want to pay a higher price and benefit from a smaller IPO "pop" than the 30% build in the system?

There is probably a massive business opportunity to get IPO investors and IPO'ing companies connected in a much more structured and technology based way.

[hylaride]

IPOs are the way they are because of a lot of historical reasons. Before everybody and their uncle had a stock trading account, the investment banks and their moneyed clients were often the only way to get access to capital in meaningful quantities. The biggest investment banks hoarded these contacts. It was therefor hard for other banks to compete. Obviously if you were going to IPO, you’d want to go to the biggest bank with the most moneyed contacts. That caused a concentration of power.

If the fundraising rules for direct listings are changed, and it looks like that may happen, then there are fewer reasons to go the IPO route (there are still benefits, such as the investment bank and their customers taking all the risk should the IPO be a flop, but that seems to not happen a lot anymore).