I'm just curious as to whether or not there are any tips you guys may have as to how to get allotted IPO shares at the offering price, not buying in the open market. Do you basically need to have a huge account with one of the lead underwriters of the IPO? I have about 500K in various online brokerages, do I have a chance? As an example, I really wanted to get in at ground level in Concho Resources and Sandridge Energy. I bought in the first couple of days and made a decent profit on both, but missed the initial 20% + gain. Thanks Guys!
Yes, being a big client at one of the underwriting firms is generally the only way to get the IPO. Basically, the firms get a certain amount, which they dish out to their bigger producers, which they in turn give to their better clients. If a certain IPO isn't in great demand, you can probably get some even if you aren't a big client, but then you probably wouldn't want it. On-line brokerages don't fit the bill.
Hi I just decided to give you a point from where you can work with. Do you remember when MA went public? I was offered 25 shares at IPO pricing. My account with the brokerage firm was in the 7 figures at that time. If you have anymore questions please feel free to ask.
Having been a broker myself, I will suggest that $500k is not going to be enough to get on the 'list'. You may get a bone thrown to you now and again, but even if ALL your assets were at ONE firm, I don't think you'd be very high the list. The good, juicy IPO's are going to require 7 figures as someone else pointed out and not sure if 7 is even enough anymore.
Put all of your eggs in one basket at a firm that will give you a prime service account (RVP), which is hard to find for 500k but possible with what is going on. Then front around to the big guys "as if". As if you had multimillions. Just never say how much you have, ever. Some of these PBs will give you leverage for your ops. Considering you will be flipping for a quick profit and blast out at issue if it does not work you should be fine. Then you have to be willing to "pay back" with business. ex. "I will take care of you if you put me in the right deals with the right alloc. and I will reward you relative to whatever we make." and take care of them. Equity trades, preffereds, and bonds(but not if you have 500k, bonds suck). On preferreds your broker makes .50/share, so if you're up 10k in a month, take 10k shares of pref. Flip out for a dime loss and net 9k. (10k - 1k(loss)= 9k) your broker walks away with 5k. that is how you get stock.
again, if you set up dvps with the majors, it is all cash, and they have no clue how much money you have. First you need an RVP(second tier PB), then you set up dvps with the majors. pretty simple. You can make arrangements with your PB to tell your guys that call up, that you do alot of business with alot of brokers and banks throughout the world. Someone with 15 million in the market would not be bragging about this like he is a big shot, because in reality, it is peanuts. So keep your mouth shut.
One more thing. Work with players at the firms you with. get some top producers lists from a lead source. Look for guys with 10+ years at the firm. You dont want a piker that just got there from citi or some other firm. He will get no stock and you wont either. He will call you and call you for business and you will be anoyed as hell. hope this helps. p