What gets into people at Motley Fool sometimes? In a missive this week a writer there imagined a fanciful world where a) investment banks all have venture capital “departments”, and b) where said groups actually make money. Even more bizarre, MF uses Overstock.com as its poster boy for shareholder-friendly behavior:
Wall Street firms make enormous profits from their venture-capital departments. So when they invest in a small, high-growth company, they’ll often delay the IPO to get in on the action before they actually open the company up to the public. They tried to do this with Overstock.com, but the company withstood the pressure. Instead, Overstock management — in what was described as a maverick and foolhardy move — issued the IPO via a Dutch auction, which leveled the playing field for small investors.