Author Topic: How to purchase IPO stocks as close as IPO price as we can?  (Read 5389 times)

nathan_wong

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How to purchase IPO stocks as close as IPO price as we can?
« on: December 05, 2014, 12:44:45 PM »
Hi,

This is a somewhat naive question as I haven't really purchased stocks on the first day before. I have been wondering about the strategy to purchase stocks on the first day that it will be trading. As most of us can't purchase LC at the IPO price beyond the 350 shares they are kind enough to give us with the DSP, I am wondering what is the best strategy for purchasing stocks to get the price as close as IPO price as we can. Say if LC is priced at $12 per share, on the first day it will be trading, if we purchase at $12 even at the time the market opens, it's unlike that we will get that price? If so, what should be the strategy? At what price would you buy?

Thanks,
Nathan

Fred93

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Re: How to purchase IPO stocks as close as IPO price as we can?
« Reply #1 on: December 05, 2014, 12:52:41 PM »
I am wondering what is the best strategy for purchasing stocks to get the price as close as IPO price as we can. Say if LC is priced at $12 per share, on the first day it will be trading, if we purchase at $12 even at the time the market opens, it's unlike that we will get that price? If so, what should be the strategy? At what price would you buy?

It is common for hot IPO stocks to OPEN for trading well above the IPO price.  Therefore, use great care when placing orders on that 1st day.  I can't tell you whether the stock LC be "worth" such a price, as I have no idea.   With many IPOs this is an absurd spike, and it comes back down.

The investment bankers try real hard to set the price so that it will go up on the 1st day, because this gives them a good reputation, and makes people want to buy their next IPO.  Effectively, the banker maximizes his reputation if he makes the choice really hard for you.  ... and they usually succeed.

I can tell you that most IPO stocks sell BELOW their IPO price at some time during the first year of trading.  Smart folks often buy then.  (They are "smart" after the fact if it goes up after they buy.)

core

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Re: How to purchase IPO stocks as close as IPO price as we can?
« Reply #2 on: December 05, 2014, 02:20:58 PM »
Unless you have a crystal ball there is no proper answer to the question as it was asked.  Probably the most sane strategy is to pick a max buying price now and hold yourself to it after the bell rings that day.  But the price may go down, so do you really want to buy as close to the IPO price as possible if that happens?  Of course not.

Speaking of bells, are they gonna let Frenchy ring the bell that day?  I think Stephanie deserves a spot on the platform too.

Fred

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Re: How to purchase IPO stocks as close as IPO price as we can?
« Reply #3 on: December 05, 2014, 02:30:52 PM »
If LC IPO follows the course of Facebook IPO, you do not want to buy the stock close to the IPO price.

Our investment goal should be to maximize profit, not to enter at some 'favorite' price point.

Victor

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Re: How to purchase IPO stocks as close as IPO price as we can?
« Reply #4 on: December 05, 2014, 07:27:31 PM »
Speaking of bells, are they gonna let Frenchy ring the bell that day?  I think Stephanie deserves a spot on the platform too.

Ask not for whom the bell tolls, it tolls for thee.  Don't ask who's ringing the bell either.

Fee

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Re: How to purchase IPO stocks as close as IPO price as we can?
« Reply #5 on: December 06, 2014, 02:52:53 AM »
HABT had their IPO recently. The IPO was at 18. It opened at 31 and then went to 36. Too much emotion for me.