Question about IPOs...

[GTaudiophile]

With Google's IPO coming up, how can individual investors like me and many of us here benefit? Is there any way?

 

[MustISO]

It's difficult unless you have a lot of cash and/or know someone who works at the company underwriting their offering. I'm not sure if any of the funds that pick it up will get an IPO price or not. Regular people will only be able to get it at the open which could be anything really.

 

[GTaudiophile]

I know someone at Goldman...

 

[GasX]

Well, if you buy at the IPO and hold it and the company does well, you are in clover...

 

[Norrlands]

And if you know someone underwriting the IPO, and they let you in on it, you are going to get hammered for insider trading, as will they. As an underwriter for D&O policies, we have to sign non-disclosure agreements. I know it is the same for those that underwrite the IPO's.

 

[djNickb]

I just plan on speculating on the future price of the stock with some options. Mmmmmmmm options

 

[Zombie]

Google IPO will be disaster for the search engine :|

 

[Reel]

Originally posted by: GTaudiophile
With Google's IPO coming up, how can individual investors like me and many of us here benefit? Is there any way?

Rarely is there a chance for individuals to get in on it. If you did and you sold it at the high point to make the big bucks, they probably wouldn't let you in on any more IPO's. From what I understand, usually IPO's are sold in large proportions and frequently to other companies.

 

[Doggiedog]

Unless you have a good connection with someone at the IPO company or the I Banks doing the deal, you will not get into an IPO.

They are usually reserved for employees or families of the IPO company or top clients or partners of the investment bank. Even if you do get in, chances are, you won't get too many shares.

I banks have something called a capital markets group that helps with the allocations of IPO shares. They usually call their best clients like Fidelity or Vanguard to gauge their interest in the IPO. The client would ask them for an allocation and the capital markets group divides up the IPO according to how much business or potential business they can get from the client. Oftentimes, the client would need to promise to buy a certain amount of shares in the aftermarket and promise not to flip (sell immediately) the shares they get.