I have been an investment banker most of my career and is now working as an IR consultant. Let me address you some of the questions you ask regarding IPOs. This may be a little late already but I hope I may be able to share some thoughts.
1. If you are a client of an investment bank or investment house, chances are they will allocate for you as investment banks are the ones who package the IPOs. A small portion of the issue size is allocated to stock brokerage houses for the retail investors, who then offer or allocate them for their clients.
2. Most of the time, extra charges only comes when you sell the stock such as taxes and broker fees, which ranges to 1% to 2% before, which depends on your relationship with your broker. Taxes will have a fixed rate while the broker fees, depende.
3. During the underwriting period, the investment bank undergoes a thing that wis called bookbuilding, which gauges how much the public is willing to buy the shares. After valuing the stock, they would come up with a price range, and will then announce the final offer price during the offering period.
4. Once a company gets public, their shares are traded in the stock exchange where you could cash in your investments through you stock broker. No lock-up periods for IPOs, lock-ups are usually implemented for strategic holders, venture capitalists and private placers.
5. Not all IPOs are good investments. It is just a vehicle for a private corporation to start getting traded in the exchange. Of course, a number of factors would have to be considered such as the fundamentals of the company, even to the point of who are its institutional investors and maybe even the investment bankers supporting the issue.
6. Stock trading on the very basics would have to be bought low, and sold high. Relatively, you buy when its bad, and sell when its good.
I hope I was able to address some of your concerns.
Pare,
I'm just citing First Gen as case study. But it does not follow na kukuha ako nito. Actually, I'm setting my sights on GMA dahil baka this na sila mag IPO. Gusto ko sana ready ako once GMA goes public. Balita ko din Robina will go public with its new capitalization needs.
Kaso nga, ignarante ako how IPO works. I'm sure other members would also appreciate to know a thing or two about this. So ire-raise ko ulit yung mga tanong ko:
1. Where do I need to go to buy shares?
2. What are the extra charges to look out for?
3. Citing, for sample purposes, the case of First Gen na may Offer Price P51.00 to P62.00 per Offer Share, ano talaga ang presyo nito?
4. How do I redeem my investment? May lock-in period ba?
5. Lahat ba ng IPOs OK pasukan?
6. When is a good time to get in and bail out, just in time for grate piece of the action?
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I have been an investment banker most of my career and is now working as an IR consultant. Let me address you some of the questions you ask regarding IPOs. This may be a little late already but I hope I may be able to share some thoughts.
1. If you are a client of an investment bank or investment house, chances are they will allocate for you as investment banks are the ones who package the IPOs. A small portion of the issue size is allocated to stock brokerage houses for the retail investors, who then offer or allocate them for their clients.
2. Most of the time, extra charges only comes when you sell the stock such as taxes and broker fees, which ranges to 1% to 2% before, which depends on your relationship with your broker. Taxes will have a fixed rate while the broker fees, depende.
3. During the underwriting period, the investment bank undergoes a thing that wis called bookbuilding, which gauges how much the public is willing to buy the shares. After valuing the stock, they would come up with a price range, and will then announce the final offer price during the offering period.
4. Once a company gets public, their shares are traded in the stock exchange where you could cash in your investments through you stock broker. No lock-up periods for IPOs, lock-ups are usually implemented for strategic holders, venture capitalists and private placers.
5. Not all IPOs are good investments. It is just a vehicle for a private corporation to start getting traded in the exchange. Of course, a number of factors would have to be considered such as the fundamentals of the company, even to the point of who are its institutional investors and maybe even the investment bankers supporting the issue.
6. Stock trading on the very basics would have to be bought low, and sold high. Relatively, you buy when its bad, and sell when its good.
I hope I was able to address some of your concerns.