There were all sorts of warts on “Chinese Facebook” (not really) Ren Ren (RENN) when it came public. This did not stop the investment bankers from gifting their best customers with shares that could be flipped to the public in the low to mid $20s on IPO day. While a complete bust, breaking below its IPO price of $14 within a week or two. While impossible to catch a falling knife, those who were genius enogh to buy at $6 could have made 100% in just under 2 weeks with a perfect entry and exit. For the rest of us mere mortals, a nice opportunity to skim 20-30-40% in a very short period of time also existed.
A price around $8 to $10 was most likely far more reasonable to come IPO at, and without the hype of the first day pop, would have led to a far more stable course for the stock. But the larger point is, there is a valid price point for everything – unfortunately, a lot of people learned that the hard way on this one.