What exactly do Underwriters do?
Vonage, after pissing off their customers with an IPO that has dropped like patchy VoIP call, is now going to pick up the tab on shares that customers don’t want to pay for. Which, if you are anything but stupid, every investor would take and then if they really wanted to own the stock would buy on the open market at the dramatically reduced price.
But still, what exactly are the underwriters - Deutsche Bank, Citigroup and UBS - doing for their money if they are not even picking up the tab when people pull out?
Another market (besides real estate) where the magic 6% is getting harder to justify.
