The "openIPO" process Message Board

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Technology Stocks : The "openIPO" process

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To: Nandu who wrote ()	2/19/1999 7:46:00 PM
From: Nandu	Read Replies (1) of 4

Just some scattered thoughts for now. 1) If you bid too low on a hot IPO, you lose out on it. 2) You can bid high, but this leads to a "prisoners' dilemma" kind of situation. If a lot of other people follow the same strategy, you will have to pay a high price for the shares. Thus it becomes very imperative to try to value the company properly before making a bid, which means: 3) You are unlikely to get a significant premium in the secondary market immediately after the IPO. Since this has been the main attraction for IPOs recently, maybe participation in open IPO is not such a hot idea. and finally: 4) The shares distributed through an open IPO is mainly going to individual investors. This increases supply in the market, again making immediate huge run ups unlikely.

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