Investing in IPOs

[eternit]

Hi,

I am interested in investing in IPO which are raising money before listing on the asx. I was wondering if anyone else has experience in investing IPO companies.

If so, what kind of analysis do you guys do to make sure the company wont go down?

Thanks guys.

 

[yogi-in-oz]

Re: Investing in IPO's

Hi,

I am interested in investing in IPO which are raising money before listing on the asx. I was wondering if anyone else has experience in investing IPO companies.

If so, what kind of analysis do you guys do to make sure the company wont go down?

Thanks guys.

Hi eternit,

... rarely is there a thread here that goes 4 days without being answered.

As that has happened to this thread, it may reflect the reality of the limitations
connected with traditional fundamental and tehnical analysis.

Truth is the majority of IPOs fall belwo their issue price, soon after the
euphoria of listing has worn off ... so, unless you are a lucky stag, then
you will likely have to wait for the stock to recover or take a loss.

... and why do we see such falls ... ???

Fundamentals ... theoretically, in a fair market, ALL the fundamental
information is out there already, in the prospectus .....

..... so, unless there is some good fundamental news in the early days
after listing, the share price will almost certainly be marked down, as
deluded stags bail out, sometimes taking a loss to avoid waiting for
a recovery.

Traditional T/A is simply ruled out altogether, due to insufficient data ...

... so, that means for the most part, it's the fundamentalists that trade
IPOs from the outset ... and from the subsequent price moves,
they OFTEN get it WRONG !!

However, if we can get our market timing right, then there's a few
advantages to trading IPOs, AFTER they have listed ... not the least
of these, may be:

A limited amount of shares on issue, making it easier for prices to move,
both up and down.

Despite any downturn, an IPO is unlikely to be going back to the market
any time soon for more cash, as they would still be cashed up from their
initial capital-raising, before listing.

-----

However, it has been proven many times, on this forum and others,
that Gann's time cycle analysis can often be a good guide to market
timing and direction ..... even BEFORE the IPO is listed ... !~!

PYM is just one example, on this forum .....

-----

Following details were posted in another thread, in December 2005:

IPOs present some real challenges to many analysts, not least, is how to
anticipate market turns in the early history of any listed entity.

Of course, if we were paid the big bucks, like blodgett and his cronies, we
could just invent some rubbish and feed it to the unsuspecting masses.

Real traders however, often need to evaluate markets, with only limited
technical data available .....

..... a typical example being an IPO.

Fortunately, with Gann's astrotrading tools, we can look ahead from listing
of the entity and make some fairly accurate assumptions about market
news/moves, on particular key dates.

So, instead of flying blind into a stag selloff, on the next hot ipo ... maybe
some of Gann's astroanalysis will help some traders survive the shakeout,
by exiting before the onslaught or entering after the initial sell-off ... yes ???

You can read many posts on this forum by the gurus, stating you do not
have to predict anything to make money in the stock market ... well,
trading IPOs is one trading contest, where all traders either make their
trades flying blind or they use other tools, like Gann's time cycle analysis,
to anticipate market turns ... making for better timing of trade entries and exits.

happy days

paul

P.S. .... with only limited data from the listing details, any
IPO or stock with limited data (for whatever reason)
may be readily analyzed for future key dates .....

 

[Kimosabi]

Re: Investing in IPO's

While I think of it, why isn't there an IPO thread/s on ASF?

 

[eternit]

Re: Investing in IPO's

Hi eternit,

... rarely is there a thread here that goes 4 days without being answered.

As that has happened to this thread, it may reflect the reality of the limitations
connected with traditional fundamental and tehnical analysis.

Truth is the majority of IPOs fall belwo their issue price, soon after the
euphoria of listing has worn off ... so, unless you are a lucky stag, then
you will likely have to wait for the stock to recover or take a loss.

... and why do we see such falls ... ???

Fundamentals ... theoretically, in a fair market, ALL the fundamental
information is out there already, in the prospectus .....

..... so, unless there is some good fundamental news in the early days
after listing, the share price will almost certainly be marked down, as
deluded stags bail out, sometimes taking a loss to avoid waiting for
a recovery.

Traditional T/A is simply ruled out altogether, due to insufficient data ...

... so, that means for the most part, it's the fundamentalists that trade
IPOs from the outset ... and from the subsequent price moves,
they OFTEN get it WRONG !!

However, if we can get our market timing right, then there's a few
advantages to trading IPOs, AFTER they have listed ... not the least
of these, may be:

A limited amount of shares on issue, making it easier for prices to move,
both up and down.

Despite any downturn, an IPO is unlikely to be going back to the market
any time soon for more cash, as they would still be cashed up from their
initial capital-raising, before listing.

-----

However, it has been proven many times, on this forum and others,
that Gann's time cycle analysis can often be a good guide to market
timing and direction ..... even BEFORE the IPO is listed ... !~!

PYM is just one example, on this forum .....

-----

Following details were posted in another thread, in December 2005:

IPOs present some real challenges to many analysts, not least, is how to
anticipate market turns in the early history of any listed entity.

Of course, if we were paid the big bucks, like blodgett and his cronies, we
could just invent some rubbish and feed it to the unsuspecting masses.

Real traders however, often need to evaluate markets, with only limited
technical data available .....

..... a typical example being an IPO.

Fortunately, with Gann's astrotrading tools, we can look ahead from listing
of the entity and make some fairly accurate assumptions about market
news/moves, on particular key dates.

So, instead of flying blind into a stag selloff, on the next hot ipo ... maybe
some of Gann's astroanalysis will help some traders survive the shakeout,
by exiting before the onslaught or entering after the initial sell-off ... yes ???

You can read many posts on this forum by the gurus, stating you do not
have to predict anything to make money in the stock market ... well,
trading IPOs is one trading contest, where all traders either make their
trades flying blind or they use other tools, like Gann's time cycle analysis,
to anticipate market turns ... making for better timing of trade entries and exits.

happy days

paul

P.S. .... with only limited data from the listing details, any
IPO or stock with limited data (for whatever reason)
may be readily analyzed for future key dates .....

Thanks Yogi. Good info

 

[Joe Blow]

Re: Investing in IPO's

While I think of it, why isn't there an IPO thread/s on ASF?

Well, there kinda is, but it hasn't seen much action in a while: https://www.aussiestockforums.com/forums/showthread.php?t=278

Maybe you could add an upcoming IPO to the thread and bump it for us.

 

[Brujo]

Re: Investing in IPO's

I would have to say that any worthwhile IPOs at the moment are pretty much closed shops.

They go to market because s708 of the Corporations Law say they have to and because the ASX requires a spread of shareholders.

You need to be either connected to the founders or be a very favoured client of a broker sponsering the float, at the moment.

The average punter has little chance of picking up an allocation in a uranium or other prospective float at present.

 

[barnz2k]

Re: Investing in IPO's

Noticed an IPO recently too i might be interested in. DO they normally start slightly higher at the very start and then drop below?

The one im interested in is quite cheap (compared to anything else ive invested in). the overall share sale is for about 5mil.

If im planning a longterm investment - is it better to try and get in at the IPO or try shortly after watching its opening movements?

This IPO supposedly has the backing of a major finance guy too (i dont know this kinda stuff so no idea who he is..)

 

[surfingman]

Re: Investing in IPO's

Noticed an IPO recently too i might be interested in. DO they normally start slightly higher at the very start and then drop below?

This depends on the company and the sector its in, CUX a U stock the offer .25 ran high .72 than droppped off within a month now at .41, Oil IPOs are not good buying at moment in my opinion.

If im planning a longterm investment - is it better to try and get in at the IPO or try shortly after watching its opening movements?

Check if there are options attached to the IPO this can have added value to the shares.

Research the company and compare to other similar previous floats and see how they are doing such things as industry sector, place of operations, market cap, management team. Previous floats check out www.ASX.com.au

Another good thing to do is open a thread if one isn't already open and discuss this float on ASF.

This IPO supposedly has the backing of a major finance guy too (i dont know this kinda stuff so no idea who he is..)

Check the prospectus for this information usually available from the companies website or google the name and see what info come up about it. In my opinion this can have a good weighting on stock, because if its underwritten by a company they must have a really good line of evidence to believe in this company, as they will buy any shares that aren't sold by closing date of the IPO.

 

[barnz2k]

Re: Investing in IPO's

cheers surfingman good info.
il do a bit of reaseach on that and maybe start a thread here.