Etsy Inc. (NASDAQ: ETSY) was one of the three hot initial public offerings on Thursday, and the tone may have just given the IPO market a much needed foundation. The stock doubled out of the chute on Thursday, trading as high as $35.74 after pricing at $16 per share.

It is hard to say that investors who got in on the IPO would be disappointed that the stock did not close with a true double on the day. Shares closed at $30.00 even on Thursday, with some 19.7 million shares trading hands on the debut alone.

What is amazing here is how Etsy’s IPO was engineered to be a home run, and that the bookrunners just did Etsy a disservice at the same time.

Etsy sold some 16,666,666 shares in its IPO. Etsy sold 13,333,333 shares on behalf of itself, and selling stockholders sold 3,333,333 shares. It seems to be a given that the underwriters’ overallotment option for up to 2,499,999 additional shares would be exercised in full, so let’s make that new float some 19+ million shares. That means that the entire float changed hands — or more if the greenshoe option had not been exercised.

So, how did this get engineered to be such a home run? And how did this hurt Etsy and its selling shareholders?

24/7 Wall St. asked IPO traders about how this, and others, are engineered. We have been told that roughly 20 large institutional investors received the lion’s share of this IPO. It was also said that many very large institutions and key accounts at the firms received no Etsy shares — or almost no shares.

What this means is that maybe 2 million, or 3 million shares, are actually out as the true free float. If funds from Fidelity, Vanguard and elsewhere were given shares, they are almost certainly not going to have unloaded on the launch of the IPO. After all, they might have wanted even more shares than were available.

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Valuation may be a factor for most investors. Etsy was reportedly valued at about nine times its annual sales, and now that will be even higher. That makes Amazon look cheap.

Short sellers likely are going to have a hard time getting shares to borrow in the days ahead when it becomes marginal. When short sellers do get shares, the cost to borrow likely will come at a sharp premium versus the traditional loan call rate.

What is amazing here is that Etsy has been losing money. Also, there were some skeptical investors and market pundits who said that the financials in Etsy’s pre-IPO filings with the Securities and Exchange Commission did not exactly jive with claims that had been made back before Etsy filed to go public.

As far as how this hurt the company and the sellers of shares, well that is easy. Pricing at $16 and closing at $30 means that nearly $200 million in extra capital did not end up in Etsy’s coffers. If insiders sold 2.5 million shares at $16.00 and the stock doubled on the first day of the IPO, then a collective $40 million or so got left on the table. Then, the IPO buyers, who took none of the start-up risks and risks associated with running a private company, just got to see all that post-IPO upside without taking the years of risk that Etsy and its backers took — a massive opportunity cost here.

Etsy’s joint bookrunners were Goldman Sachs and Morgan Stanley. Co-managers were listed as Allen & Company, Loop Capital Markets and The Williams Capital Group. Does it seem fair that the underwriters for Etsy left this much extra money on the table?

The good news is that you cannot count $1 of raw upside as $1 of full opportunity cost for a firm selling shares in an IPO. The Etsy IPO would have been considered a flop had the IPO priced at twice the $16 price and then the shares slid lower. Still, it is really hard to argue that Etsy’s underwriters could not have priced Etsy higher — say $20, or even a tad higher. That higher pricing might not have generated the same buzz where the stock doubled in the post-IPO pop, but Etsy did close at $30.

Anyhow, Etsy was a serious win for the IPO market in general. Serious money was made, and serious money was left on the table. This is likely to help keep some interest in the IPO market.

As far as the other two crucial IPOs on Thursday, they both did well too.

Virtu Financial Inc. (NASDAQ: VIRT) rose over 16% to $22.18 on the day, with 15.6 million shares trading on the debut. Its IPO was at $19 per share for 16.5 million shares. Virtu is classified as a market maker, but it is involved in high frequency trading and it almost never loses in the market. An SEC filing showed that it had only had one losing day in the markets in recent years — like shooting fish in a barrel.

Party City Holdings Inc. (NYSE: PRTY) closed up over 21% at $20.70 on over 18 million shares on Thursday. This party and events supply retailer is where you have probably bought costumes and/or party decorations if you live in a major city. Party City’s IPO was 21.9 million shares with a total size of 21.9 million shares.

The IPO market just got three solid names off on the same day. The bull market may be six years old, but the first quarter of 2015 was actually very weak in IPO offerings.

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Some investors might be put out that GoDaddy Inc. (NYSE: GDDY) finally broke down under the $25 mark that the investment banking firms were trying to hold. The website registration and hosting services provider closed down 1.35% at $24.78, but this was the first day under $25 of its 11 trading days since coming public. GoDaddy might not be enough to thwart the IPO market, particularly when you consider that it is still up handily from the formal $22 IPO price.

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