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Did 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

by acchow 9y ago

Did 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 ago
Not 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 ago
Yep, 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 ago
  Google 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 ago
      Search "google dutch auction ipo"
    - tristanj 9y ago
      http://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 ago
        Sorry, 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 ago
        I 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...
        Simon_says 9y ago
        "Play it safe" doesn't make sense in this context. Dutch auctions' purpose is to incentivize buyers to bid the highest price they're willing to pay.
        simonh 9y ago
        Except it doesn't do that. In an open auction if someone bids higher you know you won't get any shares unless you raise your bid. In a Dutch auction if you keep your bid low there's always a chance you will get your shares and at a good price. As actually happened in the Google case. Yes you're risking you might not get any shares, but bidding higher risks unnecessarily pushing the price higher for yourself and everyone else.
- jacquesm 9y ago
  That would stop the issuers from making a bundle on just about every IPO and we can't have that now, can we?
  - acchow 9y ago
    So this is pretty lazy anti-intellectualism. Can you provide some evidence that the investment banks are colluding on IPO pricing?
    - hobs 9y ago
      How is that anti-intellectualism? Not saying they are right, but criticizing wallstreet/giant tech companies for price fixing is not that.
      - acchow 9y ago
        They are claiming the banks are fixing prices without offering any proof. Well, the "proof" being "we all know banks are greedy and evil, so they must be doing this"
        hobs 9y ago
        I make no claim they are or not, simply that making a claim about banks doing something isnt anti-intellectualism, unless you believe making an unverified claim (in your eyes) is anti-intellectual. Wikipedia states "Anti-intellectualism is a hostility to and mistrust of intellect, intellectuals, and intellectualism commonly expressed as deprecation of education and philosophy or dismissal of art, literature, and science as impractical and even contemptible human pursuits.[1]" None of that is happening in the grandparent (as far as I can tell.) You can certainly accuse them of biased unverified information and demand proof, its just not anti-intellectualism.
        davidw 9y ago
        They are quite literally setting the prices of IPO's though, by fiat, and not via an auction or some other market-oriented mechanism. I have no opinion about actual 'collusion' but the mechanism looks pretty bad seen from afar.
- chimeracoder 9y ago
  > 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. There's nothing dirty about it. Public investors prefer to have a single price, because that's, well, how public markets generally operate after an IPO. They don't want to have to participate in an auction. The purpose of underwriting banks is to provide a single price to public investors while also providing a competitive market for the companies. The auction occurs between the underwriting banks, who compete for the company's business. The company chooses the bank that they want to use for their IPO (price being one of several factors, as is true for any marketplace). There's some risk involved, which is why underwriting banks effectively take a cut - in that sense, they're acting like an insurer, which takes a premium in exchange for absorbing risk for both parties.
  - kcanini 9y ago
    > There's nothing dirty about it. Public investors prefer to have a single price, because that's, well, how public markets generally operate after an IPO. In what sense is there a single price in public markets? There is a constantly-shifting order book full of many different prices, and the price of the last trade changes by the second. If IPOs were conducted as a multi-item second-price auction, then everyone could indeed pay the same, fair price, more in line with what you described than the public post-IPO market.
  - sytelus 9y ago
    Why one need underwriter at all? Why certain investors are offered lower unfair price?
    - chimeracoder 9y ago
      > Why one need underwriter at all? Why certain investors are offered lower unfair price? Those are two completely different things. Underwriters are there to ensure that the company is able to predict the amount of money that an IPO will raise. There are all sorts of legitimate reasons that a company needs to be able to predict the amount of money an IPO will bring in, starting with the fact that it's literally the entire point of an IPO. Even in the Dutch-auction style that's been proposed in other comments, you don't solve the problem that some investors will be able to invest at the IPO price and others won't. The supply is finite; as long as demand ends up exceeding supply, you're still running the risk of people not being able to purchase shares, except now you've also done away with the invariant that a company can predict the amount of money it's going to raise. (Note that even Google, which famously used a Dutch auction for its IPO, had an underwriter, and the underwriter had to change the share price at the last-minute because some larger institutional investors indicated that they were going to back out of the IPO and wait to trade later in the day. If that had ended up happening, it would have completely wiped out the money that Google was trying to raise by having the IPO in the first place).
- qubex 9y ago
  If I'm not mistaken the Google (GOOG) IPO was in the form of an auction, organised by their chief economist Hal Varian (wonderful name). Though based on a firm economic foundation and financially sound, the idea itself was (and remains) somewhat controversial.
kartD 9y ago
Thanks 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 ago
  I'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 ago
  I 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 ago
    Free 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 ago
      How's their mobile app on iOS?
      - jnisenbom 9y ago
        Pretty similar to android (IMO)
toephu2 9y ago
You got half you order filled at $17 with Schwab on opening day? Or it fills before market open?
- acchow 9y ago
  Yes, half my order filled at $17. Happens right before the market opens, and is immediately ready to trade once the market opens.
bguillet 9y ago
Do you need to be an accredited investor to subscribe to an IPO?

by acchow 9y ago

WheelsAtLarge 9y ago

Not 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 ago

Yep, 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 ago
Google 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 ago
    Search "google dutch auction ipo"
  - tristanj 9y ago
    http://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 ago
      Sorry, 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 ago
        I 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...
        Simon_says 9y ago
        "Play it safe" doesn't make sense in this context. Dutch auctions' purpose is to incentivize buyers to bid the highest price they're willing to pay.
        simonh 9y ago
        Except it doesn't do that. In an open auction if someone bids higher you know you won't get any shares unless you raise your bid. In a Dutch auction if you keep your bid low there's always a chance you will get your shares and at a good price. As actually happened in the Google case. Yes you're risking you might not get any shares, but bidding higher risks unnecessarily pushing the price higher for yourself and everyone else.
jacquesm 9y ago
That would stop the issuers from making a bundle on just about every IPO and we can't have that now, can we?
- acchow 9y ago
  So this is pretty lazy anti-intellectualism. Can you provide some evidence that the investment banks are colluding on IPO pricing?
  - hobs 9y ago
    How is that anti-intellectualism? Not saying they are right, but criticizing wallstreet/giant tech companies for price fixing is not that.
    - acchow 9y ago
      They are claiming the banks are fixing prices without offering any proof. Well, the "proof" being "we all know banks are greedy and evil, so they must be doing this"
      - hobs 9y ago
        I make no claim they are or not, simply that making a claim about banks doing something isnt anti-intellectualism, unless you believe making an unverified claim (in your eyes) is anti-intellectual. Wikipedia states "Anti-intellectualism is a hostility to and mistrust of intellect, intellectuals, and intellectualism commonly expressed as deprecation of education and philosophy or dismissal of art, literature, and science as impractical and even contemptible human pursuits.[1]" None of that is happening in the grandparent (as far as I can tell.) You can certainly accuse them of biased unverified information and demand proof, its just not anti-intellectualism.
      - davidw 9y ago
        They are quite literally setting the prices of IPO's though, by fiat, and not via an auction or some other market-oriented mechanism. I have no opinion about actual 'collusion' but the mechanism looks pretty bad seen from afar.
chimeracoder 9y ago
> 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. There's nothing dirty about it. Public investors prefer to have a single price, because that's, well, how public markets generally operate after an IPO. They don't want to have to participate in an auction. The purpose of underwriting banks is to provide a single price to public investors while also providing a competitive market for the companies. The auction occurs between the underwriting banks, who compete for the company's business. The company chooses the bank that they want to use for their IPO (price being one of several factors, as is true for any marketplace). There's some risk involved, which is why underwriting banks effectively take a cut - in that sense, they're acting like an insurer, which takes a premium in exchange for absorbing risk for both parties.
- kcanini 9y ago
  > There's nothing dirty about it. Public investors prefer to have a single price, because that's, well, how public markets generally operate after an IPO. In what sense is there a single price in public markets? There is a constantly-shifting order book full of many different prices, and the price of the last trade changes by the second. If IPOs were conducted as a multi-item second-price auction, then everyone could indeed pay the same, fair price, more in line with what you described than the public post-IPO market.
- sytelus 9y ago
  Why one need underwriter at all? Why certain investors are offered lower unfair price?
  - chimeracoder 9y ago
    > Why one need underwriter at all? Why certain investors are offered lower unfair price? Those are two completely different things. Underwriters are there to ensure that the company is able to predict the amount of money that an IPO will raise. There are all sorts of legitimate reasons that a company needs to be able to predict the amount of money an IPO will bring in, starting with the fact that it's literally the entire point of an IPO. Even in the Dutch-auction style that's been proposed in other comments, you don't solve the problem that some investors will be able to invest at the IPO price and others won't. The supply is finite; as long as demand ends up exceeding supply, you're still running the risk of people not being able to purchase shares, except now you've also done away with the invariant that a company can predict the amount of money it's going to raise. (Note that even Google, which famously used a Dutch auction for its IPO, had an underwriter, and the underwriter had to change the share price at the last-minute because some larger institutional investors indicated that they were going to back out of the IPO and wait to trade later in the day. If that had ended up happening, it would have completely wiped out the money that Google was trying to raise by having the IPO in the first place).
qubex 9y ago
If I'm not mistaken the Google (GOOG) IPO was in the form of an auction, organised by their chief economist Hal Varian (wonderful name). Though based on a firm economic foundation and financially sound, the idea itself was (and remains) somewhat controversial.

kartD 9y ago

Thanks 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 ago
I'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 ago
I 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 ago
  Free 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 ago
    How's their mobile app on iOS?
    - jnisenbom 9y ago
      Pretty similar to android (IMO)

toephu2 9y ago

You got half you order filled at $17 with Schwab on opening day? Or it fills before market open?

acchow 9y ago
Yes, half my order filled at $17. Happens right before the market opens, and is immediately ready to trade once the market opens.

bguillet 9y ago

Do you need to be an accredited investor to subscribe to an IPO?