Let's say a company IPOs by selling 1,000 shares at $1/share. An investor buys them all. Opening bell rings and demand let's that investor sell shares at $2/share.
So the company sold 1,000 shares for half of what people were willing to pay. The investor bought shares at half the price they could sell them for.
This is akin to AirBNB selling dollars for 50 cents.
Losers: Existing Airbnb shareholders who have shares in a company that could have raised $7B in cash but instead raised $3.5B. In theory, the mispricing "cost" Airbnb around 4% of its market cap, so existing common shares are worth 4% less than they should be.
But there's a caveat[1].
Companies like Airbnb (no stable profit) are almost entirely valued on sentiment and expectation. Assuming perfect information and rational actors, in an alternate universe, a direct listing would have resulted in around a $146[2] share price, on top of which the company can raise a secondary listing for $3.5B without affecting the share price. They'd have the same assets and liabilities as they have today, except pocketing the difference (by limiting dilution) instead of handing it to investors.
However, there's no certainty that the valuation would be $146 today had they gone this route. Humans, especially hype-powered retail investors who like to jump on flashy IPOs, are very susceptible to things like IPO bumps when making their buy or sell decisions. An entire field[3] of investing with significant buying power essentially relies on predicting sentiment.
If I'm a common shareholder, sure I'm sad that my shares are worth maybe 4% less than they "should" and that the financial world pocketed the difference, but I'm probably pretty happy my shares are worth what they are and aren't too interested in, for example, rehashing the deal or picking a offering strategy that could have swayed investor sentiment in a way that made my shares worth much more than 4% less.
[1] - The impact of "more perfectly" priced IPOs on market sentiment and thus public valuation is the most significant factor, but a secondary one is the practical aspect that the IPO process consists of a lot of risk, both on the part of the underwriting investment bank who gives the company the money raised in the IPO and the small number of powerful investors get access to (often) preferential pricing from the investment bank in exchange for an advanced commitment to buy the shares and hold for some agreed upon time. This illiquid market is dominated by relatively few actors. An IPOing company who doesn't "play ball" may find itself unable to find someone willing to underwrite their funding round or buy into it at all. [2] - This theoretical loss per share is computable two ways. The easy way is that they "left $3.5B on the table" which divided into Airbnb's current market cap of $84B is ~4%. The other way is the counterfactual way. Airbnb currently has 600M shares outstanding, having issued 50M shares in the IPO in exchange for $3.5B. So if not for the issuance, Airbnb is worth $80.5B with 550M shares outstanding, or $146 per share. [3] - https://en.wikipedia.org/wiki/Technical_analysis
