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Learning, Sharing, and Teaching => Investor Alley => Topic started by: FiguringItOut on December 02, 2020, 01:33:07 PM

Title: IPO investing
Post by: FiguringItOut on December 02, 2020, 01:33:07 PM
Never invested in individual stocks before.
I want to invest in Airbnb IPO.
How do I do it at the IPO price?

I have brokerage account at Vanguard, but it's fully invested in mutual fund. 

Please take me step by step as I don't know how to do this.
Title: Re: IPO investing
Post by: reeshau on December 02, 2020, 07:29:13 PM
You generally cannot invest in the IPO, as an individual investor.  The offering goes through the investment banks running the books, and from them through to full service brokers that sign up to buy X shares at Y price, through their customers or directly.

To try, you can call Vanguard and ask if you can buy shares.  They probably aren't participating.

The best you can do is to buy on opening day, or if it really pops, wait for the first good drop.  This could happen at the first earnings call, or with some macro event like Covid.  But you can also set an alarm for 180 days after the first day of trading, when restricted shares can trade.  There is often a drop as long holders and employees look to cash in some pre-IPO shares.

There are some sites that trade in private shares, but you generally have to be an accredited investor (read: already have a big investment portfolio) to participate.

The other option is to look at SPACs.  These blank-check companies do trade publicly ahead of a merger with a private operating company--Another way to IPO.  I am having a great experience with Luminar, which will begin trading as LAZR tomorrow.  (The SPAC was GMHI)  The SPAC route is faster and cheaper than a regular IPO, and for good reason--There is less regulation and oversight of them.  So, they also can attract riskier / sketchier companies.  So, you need to know enough to do your own due diligence.  The proxy statement on Luminar was more than 1 inch thick--prob. 600 pages, with exhibits.  But, It's a way in.
Title: Re: IPO investing
Post by: J Boogie on December 03, 2020, 09:34:18 AM
SPACs are all about how much you trust the management team, unless the target acquisition has already been identified and the terms detailed.

One thing I really like is that they generally come out at $10.50 per share so you can quickly assess how much the SPAC is being valued above its net asset value. I think SPACs are becoming and will be the tool that dismantles the wall excluding retail investors from opportunities previously only available to accredited investors.

I just bought a few hundred shares of BTWNU due to my faith in Peter Thiel's ability to find/found transformative companies. Never heard of his partner Richard Li but it makes sense for him to partner with an established investor in the region they are seeking to make an investment. I will probably add more as I trim other positions that are nearing what I feel are tops. And given BTWNU is at 10.78, that's a relatively small premium to pay to invest on the ground floor with legendary investors.

Based on how SPACs seem to go, I will probably trim at least half of my BTWNU prior to the listing of the underlying company they invest in (if the price justifies it of course).

Title: Re: IPO investing
Post by: FiguringItOut on December 03, 2020, 09:56:44 AM
Thank you