By Galen Moore
Zipcar’s bang-up initial public offering today has spawned all sorts of tech-press punditry. Some of it needs to be dispelled. Here are three myths about the Zipcar IPO that have little, if any, basis in reality:
1. Zipcar proves that a company can IPO without showing profit.
It doesn’t prove anything of the kind. It’s true Zipcar posted a $15 million net loss in 2010. But that’s nothing new. 2007 was a high-water mark for IPOs nationwide. Twenty New England companies went public that year. At least 11 of them priced on the public markets with net losses on their books for 2006. Some of those – Constant Contact (CTCT), Netezza, Athenahealth (ATHN) – are among the Boston tech industry’s most successful recent companies. For investors, growth is more important. Zipcar has shown plenty of that.
2. Zipcar’s underwriters shafted the company and its investors.
Bloomberg News reported Zipcar’s underwriters bought shares at $18 last night. Some time this morning, they started trading at $29.50, according to Google Finance. In a post today, Business Insider suggested Goldman and the other investment bankers who underwrote the offering somehow knew this would happen and ought to have paid $23 to $24. (I haven’t seen this notion anywhere other than Business Insider.) In all likelihood, the Goldman clients who bought Zipcar shares paid something in the neighborhood of $19 – then turned around and quickly sold them for $19.50. Those buyers quickly re-sold the shares, and so on down the tiers of hopefuls who vied to get their hands on Zipcar before the market opened. The bottom tier paid $29.50 and may be biting their nails now, as it looks like the stock will close the day around $28. Each calculated the risk and return, and only time will tell who got the better half of each deal. I’m no stock picker, but I’d wager shares in Zipcar might not be quite as hyper-attractive if oil prices stabilize.
3. Zipcar investors are partying in the streets.
Some of them are, and some may not be. Like the tiers of buyers leading up to the IPO, Zipcar had tiers of venture capital investors. At some point, around 2003, the company was recapitalized, and presumably some of those investors were crammed down. It’s worth noting that early investor Globespan Capital Partners isn’t listed among 5 percent owners on the company’s S-1 filing. Co-founder Robin Chase, Zipcar’s first CEO, is also not listed among individual major shareholders.
I may or may not file for an IPO myself, come to think of it. The Times’ DealBook 
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