From a company's perspective, having a low offer price relative to the closing price on the first day of trading means that the company could have raised more money.
Why is it that companies want their share price to pop after an IPO?
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Good publicity.
Just look at fb op - phenomenal ipo from company perspective, but bankers got slammed by negative press etc. If you were a decision maker at a fund that invests in ipos, for example, would you keep investing if you kept losing money immediately after the company went public (even if just in the short term)?
It's the age old question in the IPO markets. Companies should want the highest price possible and IB's should have that in mind because the company is the client and therein lies the IB's fiduciary responsibility. But as others have said, a company is only going to use the services of an IB occasionally (following equity offerings, debt issuance, m&a services) but the IB is going to interact with the asset managers who buy the IPO on a daily basis so they have to keep them happy. It's also much easier for the IB to sell at a lower price for obvious reasons, and the IB wants take the path of least resistance and they don't want to price it too high and not be able to build their book, get egg on their face and have to go back to market with their head between their legs at a lower price. Or screw over their investors by having the shares fall below the IPO price. FB's the poster child for pricing too high.
I know a few tech industry guys in Silicon Valley who hate all finance types, especially IB's, because they feel like when they sell their company through an IPO they're always getting short changed 15-20% on the net proceeds so that some suit back east can get a big initial pop on their share purchase, and then sell it relatively quickly (or even absolutely quickly and just dump the shares as soon as they can realize the initial appreciation) so they're not even long term investors that give a shit about the company, they just want the initial gain. People have tried to go the Dutch Auction way in the past and Google did it and it seemed to go relatively well for them but as far as I know it hasn't caught on for most public offerings.
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