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Question about IPO and how to buy it at the right time ? - 677 - 03-19-2014 05:40 PM
Say for example, when an IPO goes public and is available for everybody to buy, does it go public on the initial offering price or it goes on a price that already reflects the market interest, say they decide to do TWITTER initial offering 30 USD, when I will have the chance to buy it(as soon as is publicly available through my broker, will it be 30 USD or say 50 USD(because a lot of banks have already invested in it?)
- jeff410 - 03-19-2014 05:49 PM
It may open higher or lower than $30 depending on the demand.
- underexposed... - 03-19-2014 05:53 PM
look at Facebook as an example....its IPO was I think $44.00/share....from the get go it fell until it stabilized at less than 1/2 its IPO price....it is just NOW (18 months later) that has recovered and is passing where they thought it would start.
Twitter at least has revealed its financial situation already....Facebook kept it hidden until it had to be revealed.
http://www.independent.co.uk/news/business/news/twitter-lifts-lid-on-its-finances-at-it-aims-for-1bn-float-8857592.html
it is a money losing company, struggling to find revenue sources though as a concept the product is very popular.
IF (and I am not) I were interested in this stock...I would want the initial activity to slow down until I could see its real direction....I don't like putting money into losing companies....I am sure that most of the initial investors in Facebook wish they waited a while before they put money into it.