Question

GoDaddy went public in April of 2015 . While the estimated offer price filing range was $17−19, the investment bankers, Morgan Stanley, JP Morgan, and Citigroup, ended up pricing it at $20.00 a share. However, the underwriter charged a fee of 5%. In the IPO, GoDaddy sold 26,000,000 shares to investors. At the end of the first day of trading, its closing price was $26.15. What were the total gross proceeds before underwriters' fees? How much did the underwriters get? What was the first day underpricing? Answers: $520 million; $26 million, 30.78%

Answer 1

The total gross proceeds before underwriters' fees would be $520 million. The underwriters would have gotten $26 million, which would be 5% of the total gross proceeds. The first day underpricing was 30.78%, which is the difference between the first day closing price and the offering price divided by the offering price

Step-by-step explanation: