Has anyone ever gotten in on an IPO?

[willowgirl]

Well, shoot. I missed the boat.

Etrade sent me an alert last night that I needed to reconfirm my conditional offer. It warned that I might have as little as an hour to respond. Unfortunately I didn't find it in time and thus didn't get in on the IPO. A pity as I had put in to buy 100 shares and it went up $13 a share when it hit the market today.

I can take consolation in the fact my instincts were on-point! Oh well. Better luck next time I guess.

[farmrbrown]

At least you learned a lot without having to pay a lot for the knowledge.

[willowgirl]

That's a good way to look at it! Since I signed up for IPO alerts, I've evaluated a couple of other companies too, although I didn't find any others I wanted to get in on. Eventually I suppose something will come down the pike.

[DEKE]

Mar 20, 2021 2:39:14 GMT joebill said:

"People also ask
What percentage of IPOs are profitable?
32 percent
In 2019, 32 percent of the U.S. companies were profitable after their IPO.Aug 26, 2020"

Joe, that doesn't mean the stock trade is not profitable.  If a young company goes public to raise funds to invest in infrastructure, the company very well could be operating at a loss, but the new infrastructure could help it take off. 

I invested in a company that was putting up a communications satellite.  They would always be losing money until the satellite had safely made its way to geo sync orbit. The satellite could have been destroyed at launch in a rocket failure or a navigation error could have been made that caused it to fail to reach its assigned orbital slot.  So the value of the stock stayed very low, but once it began operating in its orbital slot, all the risk was gone, the value of the shares jumped big, and the company sold itself within a year. 

[DEKE]

There are three ways that I know of to take advantage of an IPO.

1. Invest in an early stage company. The disadvantage is that by law you must be family or friend of the company founder or be a qualified investor, meaning you make over $250K per year in income, or you have over $1M in net worth over and above the value of your primary residence. Another disadvantage is that you don't know when the company will go IPO, so you can wait for years for the company to finally do the IPO, and as an insider, you have to wait 6 months until you can cash out. The advantage of doing it this way is that you make the most money and it is usually Fed income tax free and even some states, like NJ, will waive most or all of the income taxes. To participate in an early stage investment, you have to get your name out there and network with other investors so that you get a chance to evaluate lots of new companies. Even the most professional investors assume a rule of 6-3-1. Six investments will lose money or just break even, three will be somewhat profitable, and one will be a home run.

2. Buy shares from a company insider. Disadvantage is they are difficult to find and the income is taxed just like if you bought the shares on the NYSE. Advantage is that the company will have operated longer and you get a better chance to evaluate the chances for the company finding success. Last year I emailed all the shareholders in two companies and bought shares from vendors who had been paid with stock and needed to cash out immediately. The hard part is getting that email list. The vendors had grown tired of waiting on the IPO which had been delayed several times over 3 years. I got lucky and within a couple of months, both companies sold, one in a private sale, one in an IPO. As I am now considered a company insider because I owned the shares before the IPO, I can't sell out for 6 months. But the good news is that in both cases I got a 4x return for an 8 month investment.

3. Buy on opening day. This is easier than it used to be but still very difficult. The big investment banks, like JP Morgan and Goldman Sachs, save the IPO shares for the biggest and best customers. However, in recent years, the new brokerages have tried to make it more democratic. Schwab, E-Trade, TD, etc will make a small number of shares available to their smaller customers but it is like trying to win a lottery to get assigned the right to buy any IPO shares. I've never been able to get shares that way.

[willowgirl]

It's up another $8 today.

 

Edited to add: Deke, it's good to see you back. I've missed ya!

[willowgirl]

Trying to get in on another one. GLBE. Baby needs shoes!

[joebill]

I have seen shoes on oxen, never on a cow....Joe

[willowgirl]

LOL! Missed out on that one too. Got a message that I needed to reconfirm at 6:41 a.m. Didn't find it in time to get my bid in. The stock is going up; not going crazy the way PATH did though. Hmmm.

Edited to add: just picked up 100 shares. We'll see how it goes.

[solargeek]

willowgirl, My DD#2 got the benefits of the ZOOM IPO and they continue. They (she was there only 3 months before it happened) were given stock options at the regulated price. Now she gets a big check each month as part of the selling of the stock. It makes working the insane hours almost bearable!

[willowgirl]

Awesome, Solargeek!

My new stock ended the day $45.50 to the good, a splash of green in a sea of red. Alright!

[willowgirl]

Dumped it! The market's a little too hot for my liking right now. Made $170. Bye-bye GLBE; we hardly knew ye. But that's OK.

[willowgirl]

Trying AGAIN with DIDI! This time I kept a close eye on my account and confirmed my conditional offer in time. Now to sit back and wait to see if I actually get to buy shares ... hmm.

I'll probably get this one and it'll tank, lol.

[willowgirl]

I got it! Although TPTB decided I was only worthy of 53 shares (I had put in to buy 200). Oh well. It seems to be on the upswing, up 1% on opening day. I'll hold it for a little while and see where it goes.

Edited to add: Three hours is a "little while," right? It went on a tear ... I dumped it; made $119. That's the equivalent of almost 12 hours of milking cows in a 90-degree parlor ... not bad for simply pressing some buttons!

I'm trying not to think about how much money I would have made if I've gotten the 200 shares I asked for. Grrr.

Cool resource I just found: www.iposcoop.com/last-100-ipos/

[Deleted]

So that’s like $2/share increase right? Doesn’t seem like a lot but I don’t follow stocks all that hard.