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IPOs for the public -- really!
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February 8, 1999: 10:39 a.m. ET
William Hambrecht creates auction Web site to give individuals piece of IPO pie
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NEW YORK (CNNfn) - William Hambrecht wants to put the "public" back in "initial public offering."
Up until now, the first players to get in on the ground floor of potentially highly lucrative IPOs -- Internet companies being among the hottest in recent months -- have been investment banks and the friends of Wall Street's money men. But William Hambrecht wants to level the playing field to give average individual investors their shot.
The founder and former CEO of investment banking and broker-dealer services firm Hambrecht & Quist (HQ) has a formed a new company called WR Hambrecht + Co. to provide an auction-style electronic underwriting service called OpenIPO and will focus on companies in the Internet, computer software and consumer-goods sectors.
"There are a lot of things in the current system that a lot of people would like to get rid of. And I think it's pretty apparent the Internet has given us a new tool that's revolutionizing lots of distribution streams, and I think it will revolutionize ours," Hambrecht told CNNfn's "Business Day."
Through OpenIPO, a person bids on an upcoming IPO by designating the number of shares and the price. The new site enters the bid on the same footing as one from a large institutional investor. In the end, winning bidders all pay the same price -- the amount of the lowest winning bid that falls within the range of the offering when it's priced.
In order to participate, bidders must have an account with WR Hambrecht or one of five participating brokerages.
Referring to the technical problems experienced by other popular electronic trading sites, Hambrecht said his company has taken measures to set up the site "to handle any predictable type volume."
OpenIPO is offering its first deal Monday for Ravenswood Winery Inc. 
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