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A. The type of investors Second Life is likely to attract

B. The lessons learned from Google and Morningstar from their auction IPOs

C. Costs and risks of each type of IPO

Also, remember to use multiple references....

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Solution Summary

A traditional IPO or an online auction?

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In today's tough economic times and bear run in the stock market where liquidity is a big concern and recession is gripping the market from every end, it is difficult for a company like Second Life to raise funds via IPO in the market. Second life is expected to attract investors with a high risk appetite, especially in today's market because risk averse investors will prefer to stay in blue chip stocks and would not like to touch such a risky IPO.

Given the current market conditions, it is better for Second Life to proceed via traditional IPO by using an investment banker because investment bankers will help in subscription of the IPO. The costs paid to the investment banker will not pinch the company as it cannot afford to go all alone via a dutch auction IPO in today's troubled market conditions. Although Second life will not get as much funds as it would have got in ...

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