I like buying stock the first time it becomes available for purchase to the wide public. They usually under price them to make sure they don't embarrass themselves by not managing to sell them, which leaves something for new investors to wet their beak with as well. Of course, there are exceptions, like facebook, which nosedived on the day it was launched, but still...
I'm very much against investing in an IPO when the indexes are very high. It's the perfect time for the previous owners to sell since they can fetch a high price. To me this leads to them selling off moderate at best companies (if it's amazing then why sell?) for a big price tag.
I've actually decided to stay away from most IPOs for the next year or two, so I don't have a good idea of what's coming in 2015. I'd rather invest my money elsewhere since stocks have been doing so well lately (well, in the last few months overall; not so much this month). I'd be wary if I were you unless a blockbuster, can't miss IPO hits the markets in 2015.
OK, thanks for all the advice. It seems you're all against investing in IPOs. I'm pretty sure I'll end up investing in a few, because I like to get in as early as possible. I'll keep you guys updated if I do end up buying such stock this year. Hopefully it'll all go well.
Unless you're able to get a decent allocation in a hot and oversubscribed IPO, a lot of the time it's a false economy getting into them at the beginning. And particularly in a volatile market environment when broader market sentiment is weak. Some jump a little on the first day and then just sell off. If you don't get the first day pop, then you may as well buy it in the open market when the stock has calmed down, or at least buy on any weakness in the name.
I usually like to dabble in those that have a lockup period - I usually wait until after the lockup expires and buy a little when it seems like the insider selling is done for a while. I may sell a while later. Twitter was a perfect example. Anything I may do before then or early on with an IPO that doesn't have a lockup period will be minimal.
Yep, the problem with being a small investor is that we are never going to be in the inside track for IPOs.. we are mainly going to be the guys buying late. JR is accurate, the best way to play IPOs as an independent investor is to see when the lock-ups expire for the big insiders and buy shortly afterwards.
Yeah, we come in late, that's the issue. It'd be nice if there was a way for us to get in earlier. Facebook is another good example even though their price dropped immediately after the IPO. The big investors bought cheaply and made a fortune.
Anyone planning to invest in the Shake Shack - $SHAK - IPO on Friday? Initial price is set between $14-$16. J. Cramer see much upside potential.