Where and how can I buy IPO stocks?
IPO stands for Initial Public Offering. When a company goes for an IPO, everyone can buy the IPO in the secondary markets (stock markets). However, most of the time, you are not able to purchase the stock at the IPO price. This is due to several reasons, including: undervaluation, supply and demand/buzz Undervaluation: Most companies undervaluate their company’s stock because they want to make sure there is a market (demand) for it. The worst case scenario is when a stock goes for IPO and nobody buys it. Supply and Demand/Buzz: Because of this undervaluation, as fast as the stock opens, the price will jump immediately. So now the question is where can you buy stocks at the stated IPO price? Unless you are an underwriter (ie: One of the groups who worked on the offering), you, as an individual, cannot buy a stock at an IPO price. Example: Time Hortons: IPO at $high-teen/low twenties. As soon as the stock opened, it jump…and by end day, it increased by 20 odd percent. Conclusion: Most
