The Delay Time Of Institutionals

Discussion in 'Strategy Building' started by Nobert, Jul 15, 2021.

  1. Nobert

    Nobert

    Say a company is about to go IPO.

    Some (most(?)) will have positions prior it happens.
    Some may start building months later once the insiders start to sell off.

    Some may join the game years later ?

    I heard P.T.Jones saying that he changed his mind about NFLX due one analyst, a while after it's IPO.

    What is the time horizon for institutional player, to make a decision, to build a position in the company ?

    Some may do it before IPO and at the most it can take up to - ... ?
    (E.g they realized that they were wrong about the potential of the company & decides to build a position)

    Thanks.
     
    murray t turtle likes this.
  2. There are lots of different types of institutional investors and each will have their own mandates. Typically, most funds will invest once a stock has launched its IPO, and they may have followed the stock for some time before they enter.

    There are funds that can invest in pre-IPO companies, but as of now that’s still the primary domain of private equity and venture capital funds.

    For funds that buy public shares, their time horizon is usually 2-10 years, and they will seek investments that outperform over that time frame. Due diligence on investing can take days to weeks, depending on the company. Trading can also take days to months. Most funds will make changes around earnings season, as that’s when lots of major information is released.

    There was a study done some time ago showing that most of the price trends we observe are driven by institutional positioning.
     
    Last edited: Jul 15, 2021
    murray t turtle and Nobert like this.
  3. %%
    Months;
    less than months for smaller funds. I like PTJ but him taking out a $300 million FL mortgage is fine\ but i dont want any kind of RE mortgage now. He may like his banker, so more power to him..............................................................................
     
    Nobert likes this.