They will have you develop relationships with institutional "sales traders" by running a lot of cosmetic trades at full commission. That is, You'll simultaneously buy and sell the opening price of a stock at two different brokers. You will incur a net loss of .04 - .06 per share. You will do a lot of this, and you will be instructed to give the impression that you are a very large value fund. The volume you generate will be the brokers impetus to allocate new issue shares. These operations got very profitable in the late 90,s, but became obsolete as the IPO market came to a practical halt. Sounds as though someone thinks there will be a revival.
every broker is "big enough" its how big you are as a client that will determine what you get. i dont think buying lots of LU these days will get you anywhere. big boys on wall street got burned by one firm most of us know, there is nothing in it for them to be dealing with some no name flipping investor. if you are going to do it stick with one or two reputable names and do all the "trading" with them, while dumping to some minor league regional b/d,if you start spreading it around it wont be enough to get you anything.
professor Jay Ritter of the University of Florida is regarded as one of the world's foremost experts on IPO research. here is his webpage http://www.cba.ufl.edu/fire/programs/msf/courses_faculty/faculty/facultyinfo.asp?WEBID=1027 excellent 2 papers on the subject to start with http://bear.cba.ufl.edu/ritter/Do Todays Trades _ Oct252005.pdf http://bear.cba.ufl.edu/ritter/Monnew 12-19-05.doc
did you guys get a piece of the Chipotle IPO today? it must be much harder to get in on the action these days.
The origional poster asked a question. Has anyone heard of this type of "oppourtunity" It sounds strange to me. Can you get in trouble for buying IPO's for someone else? What if the IPO tanks...... you loose %100 And if it takes off ......... you only gain %50 Anyone have the answer to this business... Is this type of scene Illegal or sketchy to work with