Just one simple question for those that were handed your hat in BIDU...What are you going to do about it?
gharghur2, my question was how does one effectively devise a *long only* strategy and make "a lot of $" as posted prior. Yes, obviously the most logical and market savvy trade would be to realize the new deluge of shares coming into the market and wait for the opportune time to short alongside the owners of the newly minted said stock. Again, how do we make $ devising a *long only* strategy using the aforementioned knowledge. If options is involved, then why the need to buy the underlying? I think it would be a neat piece of knowledge to have , unless ofcourse like most other ET posts, the poster is full of ........ As posted: "I exploited that information and made some really nice dough on the long side - one of my best swing trades of the year on size" by: EtfTraderLives Registered: Jul 2004 Posts: 424 09-14-05 09:27 PM Read the IPO prospectus. If you had, you would have known that Goldman, Piper Jaffrey, and CSFB had 30 days from the initial public offering to purchase 481,304 ADS's at the initial offering price of $27. Thirty days forward was last Thursday when the stock bottomed out at $77/share. I exploited that information and made some really nice dough on the long side - one of my best swing trades of the year on size. Sometimes, you have to do your due diligence to make a killing!
Ever consider that the float is small and susceptive to quick momentum movement? Adding another 800K when the stock trades 5,000,000 on average a day is NOTHING. Again, CSFB, GSCO, and PIPR GOT 800K+ shares from the company at $27/share as part of their underwriting fees. Ever consider that the underwriters (GSCO/PIPR/FBCO) happen to also be market makers in the stock? http://www.nasdaqtrader.com/asp/dai...earchby=issue&Symbol=BIDU&View.x=34&View.y=20 C'mon. Put two and two together to figure it out.
Profitable trading is based on the premise that people will keep on making the same mistakes as they have in the past. In other words: "This time it will be different". (no P&D of an IPO) Yeah right!
It is common knowledge in the stock world that a stock will run up after warrant expiration, or after a secondary is priced. I guess here it is a similar situation. Call it manipulation if you like but it happens a lot.
As I understand it, the IBankers had UP TO 30 days to exercise. Is there information available exactly when they did the purchase? How do you know they didn't purchase a week after the IPO and get out at $120? How do you know if they own any more stock than necessary to make a market? My natural inclination would have been to go "short" I am just trying to learn a new wrinkle to make money when possible. SteveD