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Lets say they sell it for $10 a share and it goes up to $20 a share on the first day. That means who ever the advisors were - priced it wrong. The got half what the should have (psychological tricks aside).
I plan on buying a decent amount if I can get it for a good multiple. I think the days of IPO fever are over - although this will be the most closely watched in a long time.
Here are the best performing IPOs in recent history for 12 month period:
A quick check revealed all are making a profit and 80% are trading at a somewhat reasonable level.
Some are of course losing money:
An IPO isn't a guaranteed path to riches. Some people got rich off of IPOs, but many were part of a great wall street pump and dump scam which isn't likely to happen to google (nothing to pump).
Over the short term - 3 months - here are the best performing IPOs:
Notice none are up more than 5%
Be careful when you invest your money. $5,000 is not too little to invest or too much to invest. Invest if you feel it is a good company for a good price.
I highly recommend any of Peter Lynch's books. PL is one of the few people (I can think of only one other - WB) with a truly PROVEN history of success on wall street. Anyone else is a talking head. Both PL and WB say pretty much the same thing.
1) Only issuing a small amount of the total stock available(often 10% or so)
2) Allocating a portion of the shares to 'friends and family' who are expected to hold the stock and not sell straight away.
3) Allocating another portion of the shares to corporate partners (yahoo, etc) who again will hold rather than sell.
The net result is that only a limited number of shares are available on the open market and these are often chased by day traders looking to make a fast buck. Small investors can end up buying at the short lived peak, just before the day traders start shorting the stock.
I'm sure there'll be great demand for google's stock on IPO. Do your own research and try not to get burned.
Half of the stocks that I purchased as part of an IPO I lost money on. Very often they will price the stock higher than it is actually worth and take advantage of the demand.
So.... be careful folks. Just because Google is a great and profitable company does not mean you are going to make a killing on the IPO.
Man, am I ever pessimistic.
3-4 years ago, the time when IPOs would hit the market before lunch and then close the first day up 400-500% have long since gone. But the strategy will be the same for Google in my opinion - buy at the open and sell just before the close - pocket the money and don't look back.
do you guys think 5000$ would be a decent investment in the IPO
indiandomain - please don't seek or offer advice on how much money you should invest in stocks here. We're web professionals - not stockbrokers. And any stockbrokers who are here won't be offering their professional opinion.
Thoughts on the Google IPO? Great topic...thoughts on how much you personally should invest...this is not the place to ask ;)
I would think that $5000 or so would be a good investment.
I WOULD suggest, however, diversifying your investments a bit by purchasing other stocks in addition to a Google IPO (if/when there is one).
I'd suggest investing in an index fund or two. You can find a great readup on them here: [fool.com...]
Basically, index funds let you diversify (thus lowering risk) without the great cost usually associated with diversifying (i.e. the broker commissions on all the stocks you trade).
I talked to my banker in germany and he told me that it will be very hard to get your hands on these stocks in the first 10 minutes of trading, but that would be, what we would try with 200 grant, while i expect to get 20% of the desired amount.
only waiting for G to start ;-)
Basically - you decide how much you want to invest - and assume the market is going to price it somewhat fairly.
Then you split this over a few time periods.
Lets say you have 5,000 to invest. You could break this up into four purchases.
Buy 1250 on the day of the ipo.
Another $1250 a week later.
Another $1250 a month later.
Another $1250 a month later.
This will allow you to buy more shares when the stock is cheaper and less when the stock is more money.
It will cost you four times the transaction fees on the buy end, but would not cost you any more on the sell end - assuming you bought them all to the same account.
I talked to my banker in germany and he told me that it will be very hard to get your hands on these stocks
The people i spoke to agree on that too (They handle a few hundred million in funds)
They thought it would be a very tiny chance the public would get their hands on the stocks the first month, and predicted that investment companies would start selling stocks during the second month.
But from January 2003 there is no restriction and investors can invest freely in the world market . I am not sure its a time limited one or this is going to continue forever.
For example, you can invest in companies like Castrol, UniLever, HP through NASDAQ, NYSE etc. That's because Castrol runs Castrol India, UniLever has a stake in HLL and so on.
So, unless Google opens a subsidiary here or buys a stake in Rediff or Sify, you cannot invest in Google.
IMO , india should lift all restrictions on free trade/investment ...50 years of state controlled economy took india nowhere!
From the article that you posted -
the foreign company in which investment is to be made should be listed abroad and further it should have at least 10 per cent stake in an Indian listed company
So the number is 10 percent. You can only invest in foreign companies that have atleast 10 percent stake in Indian LISTED companies.
I remember this because there was a discussion on CNBC India. I bet there are many more fine prints ;)