Anyone really into IPOs? I use ipohome.com to get the info of new stocks. I speculate and buy good sounding companies based on fundamentals and logic. Obviously using technicals to discover lasting trends is out of the picture. Does this strategy appear too risky? I have had decent returns though. I also enjoy how these stocks move in comparison to midcap/large cap stocks. Is this volatility dangerous? Is this a good way to make money? Has anyone tried this? If so, have you been more profitable trading established companies during trends/after earnings/etc? Any strategies?
Usually if you get in at the IPO price, which some people can get into if they have higher-valued accounts at large investment banks, then you'll probably make money on about 85% of the IPOs, as they are normally discounted 10-15% from projected market value in order to sell. If you're getting in at the opening price of the IPO, not the night before at the offering price, then who knows if you'll make money. IPOs are generally overbought in the morning and then settle down in the afternoon, like Blackstone did (didn't they actually end down at the end of the day?)
I do trade at aftermarket prices. I enjoy the volatility though. Maybe I am taking too much risk cause I haven't lost too big yet. Anyway, these stocks generally do climb and settle at the end of the day when all the day traders close their positions. I do think that most of sound companies rise the following week and so. Look at lulu (lululemon Athletica Inc) for example. About Blackstone, yea it has been a disappointment. It has gone down 28 per cent since it started trading. It's initial price range was about $29-31 dollars I think, but it actually started trading at $35. Its at $25.32 now. It also has low institutional ownership.
I personally love playing with IPOs, they are exciting stocks because they move quick. I've done well recently with VMW and MR, haven't lost out on an IPO yet. I would consider IPOs to be riskier, but great returns are definitely possible if you do your research.
If you dont mind me asking, what are some factors you look into while deciding which IPOs to buy? I missed VMW, but that stock has done phenomenal. What made you decide to get into that stock though? I currently hold EJ and LULU.
Well that's the attitude to have! That is exactly why I don't risk money I can't afford to lose. Yes, many IPOs perform poorly long term, that is why I get in when it's hot and take a profit quickly.
Should have known bx was going to be a dud when they sold some to the chinese, they don't have a word for bagholder.