A question about IPO’s?
Deandre asks:
As a regular, everyday investor is it possible to make any money from an IPO? Once an offer price and date has been set how long does it take for a broker like Scottrade to get the shares of a new IPO? I see that there is a lot of money to be made from them and I was wondering if I could get a piece of the pie. Thanks
As a regular, everyday investor is it possible to make any money from an IPO? Once an offer price and date has been set how long does it take for a broker like Scottrade to get the shares of a new IPO? I see that there is a lot of money to be made from them and I was wondering if I could get a piece of the pie. Thanks
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It’s extremely tough to get in on the “good” IPO’s. The investment banker’s, like Morgan Stanley, have a limited # of shares that they dole out to the Schwab’s and Fidelity’s of the world. These companies will sell their limited shares to their preferred customer’s and usually only 100 or 200 at a time.
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Most of them don’t go up in price like you think they do. The reason you hear about some of the big ones is because they’re rare. For example, look at Vonage.
There is no way to buy at the initial offering price when using a discount broker like scottrade or schwab. The ones that are really in demand (and thus, likely to pop on the first day) have the total allocation sent to the underwriters customers.