Pricing the Competition

Salon.com's initial public offering this week raised $25 million on 2.5 million shares--not bad for a money-losing company in a less-than-lucrative industry (we can relate to that). Several weeks ago, Michael Kinsley dissected Salon's penchant for exaggerating--sometimes wildly--its financials. And in Wednesday's "Moneybox," James Surowiecki argued that Salon's Dutch-auction IPO model--which lets the market set the initial stock price--need not always be a poor relation of the traditional IPO model, in which underwriters set the initial price. (Confused about what a Dutch auction is? Let "Explainer" fill you in.)

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