Looking at trading in Linkedin stock, it is pretty apparent that the company was underpriced at the IPO and it left a lot of money on the table. I think companies which are already well known and followed should do an online dutch auction like the one Google did for its IPO. Investment bankers add value only for companies which need validation and credibility and need help to get sold.
Henry Blodget claims the bankers shafted Linkedin. I am not that cynical (although Henry knows bankers much better than I do) as I think it is quite challenging to price a company like Linkedin whose value is completely based on speculation about its future. Institutional investors in general are more conservative. Linkedin floated only 7.84 million shares, that level of supply can easily be bought by individual investors. A lot of individual investors buy stocks like they shop for brands, so it is not surprising that the stock can trade much higher than the price institutional investors were willing to pay before the IPO. In these kind of situations you just have to let the market decide and that is what Linkedin should have done with a dutch auction. Hopefully facebook will follow the Google path.