Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : CBS MarketWatch (NASDAQ:MKTW) -- Ignore unavailable to you. Want to Upgrade?

To: allen v.w. who wrote (72)	1/11/1999 11:36:00 AM
From: allen v.w.	Read Replies (1) \| Respond to of 571

Here is something from the bull market report on the IPO. Correction Last week we said that Data Broadcasting (DBCC) owns half of CBS MarketWatch. Not true. They own 38%. Look for the IPO on Thursday, to be priced between $10 and $12, although we think it will be priced higher. First trade? Anybodys guess! IPOs EXPLAINED DEPARTMENT We have received lots of emails about IPOs, Initial Public Offerings. What are they? How do I get in at the IPO price? Should I buy after it starts trading? And so on. An IPO is the sale of new stock to the public from a company for the first time as the company moves from the private sector to the public sector. Thus a secondary is the sale of new stock from a public company. How is it priced? It is priced in discussion with the investment bankers who take the risk of selling the shares to the public who want a low price, and the company that wants a high price. What risk you say? There is PLENTY of risk. What if the president is killed the morning of the IPO? What if there is an earthquake in Tokyo? We exaggerate, but things can happen; thus the risk. So, the bankers decide the price based on demand and risk. Lately, their job has been easy, but sometimes they price it too high and take a bath. How do you get in? Youve got to have an account with the investment banker that is doing the deal. Morgan Stanley Dean Witter, Smith Barney, Merrill Lynch and others, do most of the deals. The bigger account, the better. Little $10,000 accounts dont get the hot IPOs. BTW, hot IPO is really a term on Wall Street. It means that there is more demand for the IPO shares than normal and the price will start trading higher. Where will the stock start trading? Your guess is as good as mine! Some that are priced at $14 start trading at $14. Some start at $12; some start at $18; lately some Internet stocks have started at $30; $40 and $50 and higher. Should I buy after it starts trading? It depends on what type of trader you are. If you are a day-trader, then trade away to your hearts content. (BTW, most bankers dont want you to or will flat out not let you sell the stock for at least 10 days.) If you are a long term investor then do your homework by getting a copy of the prospectus from the banker beforehand so you know what the whole story is. Thats all for now. Good luck in the IPO business, but please be careful! ALLEN: