Allocations
Wit Capital's general rule of allocation is first-come, first-served, subject to our treating certain conditional offers as received at the same time. Our proprietary electronic order book has been designed to record the time and date of each conditional offer, and we begin with our objective of providing the widest possible distribution of shares to our account holders.
Here's how it works. Once an offering is posted on the Wit Capital website and a new issue alert is sent by e-mail, all conditional offers that are received by a specified time will have equal standing for the purposes of determining who will be allocated shares. Please note that the time period may change from offering to offering, but in all cases, it will be clearly specified on the page that you access to place a conditional offer. All orders received after the specified time will be tracked on the basis of the time they were received at Wit Capital.
We also reserve the right to set both a minimum and a maximum number of shares that will be allocated to customers in any particular offering. For example, if the demand exceeds the number of shares we have to sell, we typically will allocate 100 shares to each account that receives share allocations. If we do not have enough shares to allocate to account holders who we considered to have equal standing, we will use a random number generator to determine which of those account holders will receive an allocation. Otherwise, all eligible account holders placing conditional offers that have equal standing will receive an allocation and we continue the allocation process on a first-come, first-served basis. If we have shares to allocate after we complete this initial process, we will increase the number of shares allocated to account holders who submitted conditional offers for more than 100 shares using the same allocation order as we used for the first allocation of 100 shares until our available shares are allocated. In doing our allocation, we do not give priority based on the size of the order. Accordingly, please place conditional offers only for amounts that are consistent with your investment objectives.
There is, however, an important exception to the first-come, first-served allocation philosophy:
Flippers: Flippers, which we define as account holders who have sold or transferred shares within the first 60 days following the offering's pricing date, will lose their priority in our first-come, first-served allocation list for a period of 60 days after the IPO's pricing date.
Affinity groups may gain priority: In certain offerings, Wit Capital may agree with an issuer to distribute shares to Wit Capital customers who are also customers or employees of the issuer or who have some other preexisting relationship with the issuer. We call this an affinity distribution. The shares available for affinity distribution are distinct from shares available to our customers who are not part of the affinity distribution.
For some offerings, other broker-dealers participate through an e-dealer group managed by Wit Capital. If this occurs, customers of those e-dealers will participate on the same basis as our account holders.
Wit Capital reserves the right to allocate shares on any basis or to change its method of allocating shares at any time and without notice, and account holders should not expect that entering a conditional offer in any way entitles them to purchase any securities. |
