The concept of Dutch auction IPOs has been around for some time, but despite its promise of being fairer to investors, the concept hasn't really gained much traction on Wall Street. Without a doubt, Google's IPO is the most prominent company to have gone public this way, but it could be argued that the offering wasn't particularly successful. Considering the rapid run up in the company's shares following the initial sale, it would seem that Google left a lot of money on the table, which is one of the main pitfalls that these auctions are meant to avoid. Today, on-demand software firm NetSuite announced that it has filed to go public, a move that's been foreseen for quite some time. The company says it will use the Dutch auction model and that it has hired WR Hambrecht (one of major advocates of this model) and Credit Suisse to manage the sale. This is a good opportunity for the advocates of Dutch auctions to show that it can work since NetSuite has a lot going for it. It's in a very hot industry that investors are enamored with, as evidenced by soaring Salesforce.com shares, while the market will remember the big gains afforded to Google shareholders that bought in early. It's hard to imagine a better set of conditions for this model to work, so a failure would be a signal that the concept doesn't have much of a future.
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