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Technology Stocks : E*TRADE IPO Alert - Y2K and Beyond (EGRP)
ET 16.41-0.3%Dec 11 3:59 PM EST
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To: stan s. who wrote (2304)2/20/2000 2:29:00 PM
From: ChopChop99  Read Replies (2) of 10270
 
E*Trade will figure it out one day. I moved my largest account (heavily traded Platinum) out of there because a large balance (large for me, anyway) and tons of commissions did absolutely nothing to garner me IPO shares. In its place, I opened a new $3K account that will be very lightly traded. Very simple math reveals that their current approach is senseless.

I would of course prefer the return of FCFS, a system that rewards those willing to sacrifice their time and put in the effort. Since that's not gonna happen, I think the next best thing would be an approach similar to this:

1. Create an Ultra-Platinum level for those who make the trades and have over $100K in their accounts. Allocate 50% of all IPO shares to this group in the first round of the lottery. Anyone in this group who does not get allocated in this round stays in the pool until they get allocated or all shares are gone.

2. Allocate 30% to the existing Platinum level in the second round. Anyone in this group who doesn't get allocated in the second round stays in the pool for the final round.

3. Allocate the remaining 20% to account holders at large, including those from above who didn't get shares in the first two rounds.

This would be a sensible approach that would reward the customers who generate the most revenue for E*Trade, while still allowing everybody a shot. And as unfair as we might find it, E*Trade must enforce anti-flip if they're gonna garner meaningful numbers of shares for us in the first place. This may change over time, but for the moment it's really the only bargaining chip that the online brokers have to use with the underwriters on our behalf.

Chop
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