Years ago, when Google tried its unorthodox style of IPO, the business press described it as a Dutch auction:
Google will be using something called a “Dutch auction.” It’s named after a process used in Holland to bid on flowers. Here’s how it works: You and everyone else makes a bid on what you would pay for a share Google stock and how many shares you would like. When all the bids are in, Google will allocate shares on a pro rata basis to anyone who has bid at or above the initial IPO price, which is set by a threshold price that Google will accept.
Only that’s not what a Dutch auction is:
A Dutch auction is a type of auction where the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer’s price, or a predetermined reserve price (the seller’s minimum acceptable price) is reached. The winning participant pays the last announced price. This is also known as a “clock auction” or an open-outcry descending-price auction.This type of auction is convenient when it is important to auction goods quickly, since a sale never requires more than one bid. Theoretically, the bidding strategy and results of this auction are equivalent to those in a sealed first-price auction.
The Dutch auction is named for its best known example, the Dutch flower auctions.
The Google IPO was a kind of Vickrey auction:
A Vickrey auction is a type of sealed-bid auction, where bidders submit written bids without knowing the bid of the other people in the auction. The highest bidder wins, but the price paid is the second-highest bid. The auction was created by William Vickrey. This type of auction is strategically similar to an English auction, and gives bidders an incentive to bid their true value.
Apparently the OpenIPO methodology pioneered by WR Hambrecht + Co for Google was based on the public offering auction used for Treasury bills, which had somehow become known as a Dutch auction.
Ebay also uses the term this way, for an auction of multiple identical items, where all the winners pay the lowest winning bid.