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Microcap & Penny Stocks : Dollar and Under Sleeper Stocks
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To: Ga Bard who wrote (1171)10/26/1997 7:00:00 AM
From: Carl Brehm  Read Replies (1) of 8835
 
I am cautious of IPOs because they general fall once they come public.

I tend to stay away from them too, because as you say they do tend to fall. Most go up real fast for a day or so or open higher than what the IPO is for, then drop evan faster.

Here is why. A Brokerage house makes the IPO and presales at a given price to his big investors, freinds, etc. Then opening day the price jumps as people want in. Then guess what, all those big investors start selling on a rising price. They do it slow though in small blocks so the price is not effected to much untill the very end then it falls like a rock. Normally ending up below the orginial IPO price.

So how do you make the best money off IPO's. Find a full service discount broker that will let you buy into the IPO's that their compnay is doing. Then sell to the rise in the first days of trading.

Just my 1/2 cents worth (still asleep so give discounts)

Carl
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