How does one invest in Initial Public Offerings?

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mtk

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Hi , How does one apply for an ipo on nyse or nasdaq?
perhaps one of the gurus on the forum might know?
Thanks
 
Do you mean, how do you participate in an IPO and get shares at the IPO prices, or how to invest pre-IPO?
 
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You'd need a 'qualifying account' with a broker who is participating in the IPO (part of the selling group). There's usually a small group of brokers for each IPO.

Qualifying account eligibility can have a very high bar, that would exclude most retail investors.

Example eligibility for TD Ameritrade:
"Each account being registered must have a value of at least $250,000, or have completed 30 trades in the last 3 months. "

TD Ameritrade, Inc. is now at Schwab | Charles Schwab

TD Ameritrade, Inc. is now at Charles Schwab. Use your existing account information and log in to explore new account and wealth management opportunities at Schwab.
www.tdameritrade.com

Summary:

How to Buy an IPO (Initial Public Offering) Stock | The Motley Fool

Learn how to get in on the ground floor when a new company goes public. Identify the risks and rewards of buying into a company at the very start of its public offering.
www.fool.com
 
Thanks @RedOnion ..ok it appears high balances or no .of trades needed ....
from your link" Schwab's requirements are easier to meet: $100,000 in your account "
I could make that just about.

whats the security of account balances? is there any guarantee amount ( like for bank deposits in EU<=€100k)? .
 
@mtk
Apologies, I included a US link without checking. I'm not even sure if you can open an account with any of those brokers if not US resident.
 
Reactions: mtk
Its usually a bad idea anyway to take part in them as the share price on average usually falls in the future because companies only do it when they think there is big enthusiasm for their company, the recent "Big Tech" ipos are the exception and we forget about the unsuccessful Tech flops. Remember the Eircom IPO at the height of the Tech boom, the government was left with alot of egg on their faces after that one, it was only forgotten about when the Financial crash caused even bigger carnage to Joe public.
 
Agree with @Gordon Gekko - I made money on Eircom, and many other IPOs in the past.

But in my view, like putting a few bob on the Grand National, make sure its money you can afford to lose.
 
Yea fair point, but I think people are looking at the amount of money you could have made investing in for example Amazon if you took part in its IPO back in 1997, and that is the most successful one by far. However Id say only a handfull of insiders held onto those shares the whole way through, the share rose nearly 10 fold in the dot com bubble and subsequently crashed right back to its IPO price in 2001 amidst the carnage. Therefore most of the IPO and subsequent investors were out by 2001 with losses, and what if you had bought into the myriad of tech IPOs that collapsed in 2001?
 
joe sod said:
Remember the Eircom IPO at the height of the Tech boom, the government was left with alot of egg on their faces after that one,
Click to expand...

And some of the people who have not forgotten seem to have misunderstood in the first place.

The Eircom IPO was a huge success investors made 20% in the approx two weeks between subscribing to the IPO and the shares beginning to trade.
 

How many IPO's do Schwab advise on? You need to be a significant client of the Investment & Advisory Banks not executing brokers. And $100k account value won't do it. $100k annual fees paid probably wouldn't
 
EmmDee said:
How many IPO's do Schwab advise on? You need to be a significant client of the Investment & Advisory Banks not executing brokers. And $100k account value won't do it. $100k annual fees paid probably wouldn't
Click to expand...
Historically, Schwab used to be able to offer Goldman Sachs IPOs. I had forgotten that Goldman Sachs ended their stock sharing agreement with Schwab and TD Ameritrade, so I don't know if there is any avenue for retail clients with those any longer, as neither appear to have had any IPOs for a few years.

Fidelity for example have a relationship with Credit Suisse, and a few other investment banks.
Some recent Fidelity IPOs:

A nice summary of how IPO shares get allocated:
 
There's certainly an element of FOMO when it comes to IPO's. 19 companies saw their share price double on the first day this year. But there can be a lot of volatility after the first day, so you need to know your strategy; get out quick or be a buy and hold. Of the two that IPO'd last week, DoorDash has fallen and Airbnb has risen. I think 2021 will see a year of a lot of rubbish companies IPO'ing that will rise on day 1 and fall thereafter. There'll be companies like Stripe and Roblox in there too that have a long future.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
i undersatnd IPos are risky. its how to participate i am interested in - seems hard to participate !
 
I am interested in the Coinbase IPO. (largest US crypto exchange). Anyone have any info? Thanks
 
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