The IPO price was decided at $2.20, this was not set by a strict formula of EBITDA multiples or any of the other myriad of methods for valuing an entity; rather it was an assessment of the maximum the vendors thought the market would bear to fully subscribe the offer (turns out they got it right). As every first year finance student knows there are a number of methods of valuing an entity (and thus making an assessment as whether the IPO price represents good value). Every first year finance student also knows that you don't use only one method for valuation. DSH was valued by the market and actually maintained this value until c. July 15. Undoubtedly things went very wrong at DSH, but ridiculous regulation of IPO offering prices would have prevented none of them. There is simply no link between the price vendors sell a company for and its future performance.
If you are that strongly opposed to free market behaviours, I would respectfully submit you may be on the wrong forum.
DSH Price at posting:
35.5¢ Sentiment: None Disclosure: Not Held
