Replies to post #138744 on Biotech Values

[DewDiligence]

But what's in it for them? Their fees are constant…

An underwriter’s fee is generally based on a % of the gross proceeds, so there is a direct incentive for the underwriter, albeit a small one, to see the offering go off at a high price. Perhaps more important is the underwriter’s reputation—getting a relatively high price for the offering encourages future IB business.

[jbog]

Summer2762,

But what's in it for them?

Keep in mind this issue is underwritten by the four brokerage houses. They own them at $12. less commission.

Even with the price tanking today these guys are sitting pretty even if they have to hold them through the lockup period.