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You may have misheard what he said, and what he was saying was an IPO - Initial Public Offering.
It's an offer by a company of its shares to potential buyers prior to the stock actually being listed on the exchange.
If you Google it you'll probably find some more information.
Not necessarily good or bad. Depends entirely on the company and current market conditions.
Hi,
I registered here about 2 years ago with an interest in learning more about stocks and playing the trading game, but due to work etc never had time to pursue it.
I am finding that I have more time on my hands these days and would like to learn more and maybe start trading.
I have recently been given an opportunity by my best friend in Hong Kong to participate in a what he said to me was an APO. He said I could buy stocks of a company, but with a discounted price to the listing price.
Is this true and is it a good investment?
The alternative: Don't fall for any initial promise, but note the issue date and first trading date; then observe the market depth before trading opens, and see whether scalpers abound, trying to sell at a tiny profit or even get out at a small loss. Watch the first trades - usually it starts in one direction in the morning, then turns around towards the end of the trading day.
My personal rule about IPOs is: Don't buy them!
My personal rule about IPOs is: Don't buy them!
In my credulous early days as a green noob, I have taken part in numerous IPOs - especially those that were spruiked by brokers and well-meaning "eggspurt" friends. I found out the hard way, I would have been better off EVERY TIME had I waited and bought AFTER the first trading day(s). Or not at all.
This is good advice. Like all rules, it's also good to look for exceptions: Some of the government floats (e.g. early CBA and TLS) were under-priced by design to make sure investors made a profit. Other aspects which can make it worthwhile are if there is a demand greater than supply, or a significant push in the press. The biggest gain per day I've ever made was from buying into the DPL (Daily Planet, now PPN) float, as it doubled in the first 2 days.
But I'm not so sure about DPL - that may have risen initially, but the euphoria was only short-lived:
Oh god, at the risk of seem to be offering advice, don't touch it!
Even if you know nothing about the market, can't you see how diabolically and utterly risky this is?
If you've never been had before, this may just be your great opportunity.
Hi,
I registered here about 2 years ago with an interest in learning more about stocks and playing the trading game, but due to work etc never had time to pursue it.
I am finding that I have more time on my hands these days and would like to learn more and maybe start trading.
I have recently been given an opportunity by my best friend in Hong Kong to participate in a what he said to me was an APO. He said I could buy stocks of a company, but with a discounted price to the listing price.
Is this true and is it a good investment?
Oh god, at the risk of seem to be offering advice, don't touch it!
Even if you know nothing about the market, can't you see how diabolically and utterly risky this is?
If you've never been had before, this may just be your great opportunity.
Thanks to all who have responded. I asked my best friend and he indeed confirmed it is an IPO. But it won't be available publicly.
He has told me that he will leave a certain amount of shares that he can guarantee for me to purchase if I am interested and have the funds.
The company he is looking to float will be listed on the OTCBB. What he explained to me was that his company has purchased a Shell and then will be putting assets of his 3 current companies into it - forming a larger company.
He has told me that these shares will not be liquid for some time whilst his company seeks to have the OTCBB company jump onto the NASDAQ.
Once the company has jumped onto the NASDAQ - the shares will be liquid.
He has said he is raising funds so that the company may grow so that it may be able to be listed onto the NASDAQ.
The PE (Price to Earnings) ratio is 14, which he told me is quite healthy. The company is only issuing 20m shares with the float - there is a total of 70m shares, but 50m of which will retained for all the directors and previous investors.
Thanks to all who have responded. I asked my best friend and he indeed confirmed it is an IPO. But it won't be available publicly.
He has told me that he will leave a certain amount of shares that he can guarantee for me to purchase if I am interested and have the funds.
The company he is looking to float will be listed on the OTCBB. What he explained to me was that his company has purchased a Shell and then will be putting assets of his 3 current companies into it - forming a larger company.
He has told me that these shares will not be liquid for some time whilst his company seeks to have the OTCBB company jump onto the NASDAQ.
Once the company has jumped onto the NASDAQ - the shares will be liquid.
He has said he is raising funds so that the company may grow so that it may be able to be listed onto the NASDAQ.
The PE (Price to Earnings) ratio is 14, which he told me is quite healthy. The company is only issuing 20m shares with the float - there is a total of 70m shares, but 50m of which will retained for all the directors and previous investors.
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