Thursday, May 31, 2012

7 Steps to invest in IPOs (Initial Public Offering)

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7 steps to invest in IPO1. Plan the next IPO at least 3 months in advance by checking Securities and exchange commission.

2. Read carefully the underwriters of the stock and find the brokers participating in  the IPO.
3. Gather informations about the brokers and contact them telling them that you will open an account with them if they let you participate to the IPO.
4. Contact all the brokers as most of them will not let you buys IPO shares and will leave it to their best clients.
5. Usually Brokers who are involved in the distribution of the IPO shares will more likely be able to let you buy shares.
6. Set up the account and tell your broker how much you will invest in the IPO.

 7. Wait the offering date and the  price range the IPO firm is planning to sell its shares


 Important Informations about IPO:

The price of IPO's stock is very likely to raise during the first 4 hours of the offering day, but it may then adjust, there is a lot of chance that you make a decent profit if you sell within the first day, but it is recommended to make a deep analysis on the stock you are planning to purchase and keep it for at least 60 days, otherwise your broker will not let you buy the next IPO in which they will participate
and... avoid Social media's IPO as you could see with facebook, underwriters value social media network with the number of users and the valuation method is not accurate at all.
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