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$17.00 was the IPO price but only for investors with access. Your average investor with an eTrade account saw a price of $24.00+ when the market opened that mo
by habosa 9y ago
$17.00 was the IPO price but only for investors with access. Your average investor with an eTrade account saw a price of $24.00+ when the market opened that morning, and it hit almost $27.00 that day. So those folks have seen a 30%+ drop since IPO.
Given that Snap paid out billions in IPO bonuses to executives and other employees, it's turned out to be a pretty big wealth transfer from retail investors to Snap employees.
- acchow 9y agoDid you try to subscribe to the IPO? It was not hard at all. I'm an "average" investory with a standard Charles Schwab trading account and subscribed to it with a few clicks of my mouse. I imagine anyone else could with their brokerage. It was oversubscribed tho, so I got half the quantity I wanted and sold shortly after opening.
- WheelsAtLarge 9y agoNot everyone was able to buy at the IPO price. My friend was invited but could not buy any shares. BTW, being invited does not mean you'll be able to buy. It just means you'll be able to request shares.
- prostoalex 9y agoYep, same here. Fidelity account with pretty low balance but profiled for "aggressive growth", opted into their IPOs, and I got an invitation to participate. Blue Apron, too, among others.
- davidw 9y ago> It was oversubscribed tho, so I got half the quantity I wanted and sold shortly after opening. This seems like a pretty good reason to auction the shares in order to maximize the amount of money the company takes in. That they very rarely do has always seemed kind of dirty to me.
- acchow 9y agoGoogle tried to be cheeky and go the auction way. It was wrought with problems. As far as I can tell, all tech IPOs following that went back the traditional way.
- thanatropism 9y ago> problems How can I learn more about this?
- pfarrell 9y agoSearch "google dutch auction ipo"
- tristanj 9y agohttp://www.cnbc.com/2014/08/19/es-took-off-but-the-auction-didnt.html http://www.cnbc.com/2014/08/19/es-took-off-but-the-auction-d...
- jpatokal 9y agoSorry, what problems are these? The article mentions that institutional investors were unhappy about not getting their usual 15% guaranteed bounce, but it seems to have worked pretty well for Google and general investors.
- jiqiren 9y agoI don't think you read closely enough. On the low-end, banks were thinking $108 for the base price per share. As it was, the IPO ended up at $85/share because of it being a dutch-auction where most investors played it safe and did low bids. As soon as the IPO executed (at $85) it popped anyway to $100. So Google potentially lost out on $23/share (minus 7-8% cut from banks). https://www.quora.com/How-was-Googles-IPO-unique/answer/Yair-Livne https://www.quora.com/How-was-Googles-IPO-unique/answer/Yair...
- kartD 9y agoThanks for the info, I think my next bank account is going to be with Charles Schwab ( I was waffling between Ally and Charles Schwab, but this is a useful feature for me and a good step up from Robinhood).
- ZeroCool2u 9y agoI've had Charles Schwab since I was 18 and I can't recommend them enough. I've never experienced any company with better customer service.
- acchow 9y agoI was referring to the trading account, which is independent from the bank. Tho Charles Schwab bank accounts are useful because they refund your ATM fees.
- tanderson92 9y agoFree checking account helps too; they sent me two boxes of checks and a checkpad with a $0 initial balance, for no fees. And they offer you commission-free trades too if you offer to transfer in enough funds. Great, great, place to keep your finances.
- inferiorhuman 9y ago> Great, great, place to keep your finances. Has their security improved since they made HN a few years ago? https://news.ycombinator.com/item?id=8783790 https://news.ycombinator.com/item?id=8783790
- toomuchtodo 9y agoHow's their mobile app on iOS?
- jnisenbom 9y agoPretty similar to android (IMO)
- toephu2 9y agoYou got half you order filled at $17 with Schwab on opening day? Or it fills before market open?
- acchow 9y agoYes, half my order filled at $17. Happens right before the market opens, and is immediately ready to trade once the market opens.
- bguillet 9y agoDo you need to be an accredited investor to subscribe to an IPO?
- champagnepapi 9y agoBothers me that institutional investors and other insiders get preferred pricing while retail investors get less favorable pricing.
- JumpCrisscross 9y agoTo be fair, institutions are often negotiating with underwriters on the pricing. That kind of price discovery doesn't happen with retail investors.
- lallysingh 9y agoThey also commit to purchase large amounts before the final demand is known. Their price is a combination of a bulk discount and risk discount.
- acchow 9y agoSo this isn't true. Any average Joe could open a standard trading account and subscribe to the IPO.
- prklmn 9y agoThe access to shares still isn't even comparable
- dx034 9y agoIt is. The quota you'll get is the same. Just that large companies have more time to analyse and talk to others and can better estimate how much potential the stock has.
- beamatronic 9y agoFidelity has a minimum of $100k or $500k to participate in IPOs depending on the specific IPO
- acchow 9y agoThen I'd suggest going with etrade or schwab.
- will_pseudonym 9y agoAnd they can also re-invest in the stock now, at these great sale prices. “And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful” - Warren Buffett
- mikestew 9y agoSince we're pulling out pithy quotes, I have one: "the trend is your friend", and your friend is telling you to stay the hell away from this stock.
- will_pseudonym 9y agoI'll stick with the Oracle of Omaha. :)
- semperdark 9y agoDo keep in mind that he rather famously avoids investing in tech companies.
- sah2ed 9y agoHe has since capitulated. He now regrets not buying Google low when he had the chance. http://fortune.com/2017/05/06/warren-buffett-berkshire-hathaway-apple-google-stock/ http://fortune.com/2017/05/06/warren-buffett-berkshire-hatha...
- semperdark 9y agoInteresting, I actually had no idea. Thank you for the link.
- mikestew 9y agoIn which case, I wish you well in your purchase of under-valued SNAP. May it soon be considered overbought.
- csomar 9y agoThey sold at 17$ (ipo prices) not higher. So right now, both sides are equal.
- NDT 9y agoNot really. Retail investors have netted $-7 while "insiders" netted $0. This is of course assuming that they've held on to this day.
- toephu2 9y agoSnap employees can't actually sell any stock until 6 months after IPO.
- dangisafascist 9y agoIPOs are by definition "wealth transfers" from investors to business owners.
- sologoub 9y agoThe employee stock is still in lockup period, so they saw exactly no profits on this as of yet. This article is taking about July 31 as the earliest lockup expiration, but not clear as to which class of stock this is for: "The perceived catalyst for an impending drop is a total of 1.2 billion fresh shares that will become available for sale after post-IPO lockups expire July 31 and Aug. 31" Source: http://www.marketwatch.com/story/snap-short-sellers-bet-on-a-post-lockup-tumble-but-it-isnt-a-sure-thing-2017-06-08 http://www.marketwatch.com/story/snap-short-sellers-bet-on-a...
- hkmurakami 9y agoIf the company prices the IPO in a way where there is a sustained increase in the stock price, people complain that the company irresponsibly left money on the table for themselves and their employees. If the company prices the IPO in a way where the stock drops below its IPO price (FB, SNAP), people complain that retain investors who bought on opening day are now underwater. Heads I win Tails you lose?
- chrisabrams 9y agoNah cause I bought Bitcoin on Snap's IPO instead.