Obviously not. Someone at the investment bank pulled a price out of their ass, which was what the shares were initially quoted at. They subsequently rose a great deal on the actual market.

I'm not a market "fundamentalist", but they're an awfully good way of pricing things in many circumstances compared to the central planning approach of having several experts decided on a price.

I'm no economist, but I'm sure a clever one could find a good way to auction off IPO shares to get the best deal possible for the company.

GOOG did, remember.

> Someone at the investment bank pulled a price out of their ass...

It's an IPO, and the first social media network to do one. New territory, doubly so. Of course they pulled a price out of their asses.

If LinkedIn didn't like that price, they'd have gone elsewhere. They didn't. They could've affected the price, too, or chosen an auction.