Stock IPO's (Initial Public Offerings)

[highroller4321]

I think you both are possible misunderstanding my question.

The weighted average still has to be calculated at a particular time frame.

Stock A 24 hours after IPO
Stock B 4.5 years after IPO
Stock C 4 minutes after IPO

Here is some more info to address the item mentioned by highroller4321:

PROFITS BY HOLD TIMES:

DURATION HELD PROFIT % NO. OF TRADES
1-4 min. 6.3% 7
5-9 min. 5.6% 6
10-19 min. 3.3% 4
20-59 min. 2.4% 2
60 min.+ (out Day 1) 3.4% 4
Day 1* 5.2%* 15*
Day 2 2.3% 3
Held >2 days** 5.4%** 5**

*NOTE: Hard to evaluate- some stocks were sold very quickly (just a few minutes), while others held for hours. Therefore, results for Day 1 are likely misleading. As these trades were all done more than a few years ago, I am unable to get the specifics on exact time held from my broker.

**NOTE: Without one IPO, the profit was just 0.8% on the other 4 trades. So just one trade greatly skewed the numbers.

NOTE: In general, profits for stocks held less than 10 minutes were much higher percentagewise than for those sold after 10 minutes. In reality, the 13 stocks held the shortest amount of time were all sold in 7 minutes or less. This goes to show that whomever your broker is, you have a big advantage if you have a trading platform where you can get real-time streaming quotes. In other words, you shouldn't have to refresh your computer screen to get an updated quote. If all you have is non-streaming quotes, you are at a big disadvantage to those of us who have streaming quotes. Another comment along these lines- I've had a few IPO's where I bought the stocks in 10 accounts or more. So I would sell shares in one account, switch to another account to sell those shares, etc. Even holding the stock in that many accounts, I've been able to sell all the shares in all the accounts in 3 minutes or so. So if it takes you longer than that to switch accounts and sell shares in another account, again you are at a disadvantage.

Sorry it took me so long to answer- it took a lot of hours to gather the info to put this together. But I was curious about it myself, so it was worth doing.

Thank you for the detailed data!!!!! Very very interesting information.

[Recyclersteve]

An update on the Qudian Inc. (Ticker: QD) IPO, which was brought up in this thread.

The stock just opened today (Wednesday, October 18, 2017) for the very first day of trading. Here is a bit of info on it. First, I didn't make my final decision to trade it until well after midnight. Also, I didn't want to openly post that I was buying it. I'd rather have people do their own research and decide what to buy.

Now the details:

IPO's have been dead for the better part of a few years, but have just started to awaken from their long slumber.
QD's IPO range was $19-22
The final offer price (price that insiders paid for shares) was $24
The stock opened today at 10:52:06 at $34.35
I sold at 10:53:21 at $35.30 (sold 1 minute, 15 seconds after the stock opened in both accts. I traded the stock in)

Now let me share a few more details about this one. It was a bit of a mixed bag. Chinese IPO's don't always do that well, at least initially. Alibaba (Ticker: BABA) was a great example early on. Also, China has a reputation for fraudulent transactions- think about how many counterfeit coins come from China, for instance.

That said, there are positives that I could see even late last night. This IPO was getting a fair amount of buzz- someone brought it up on this site (without any prompting from me) and I had a few friends not on this site asking about it. So that part is good. Also, when IPO's do well, tech IPO's often do even better than those in other sectors. Tech is considered sexy and gets lots of press.

The fact that the offer price of $24.00 was 17.1% above the midpoint of the offer range (midpoint of $19-22 range is $20.50) is usually good. Of the 46 IPO's I'd done prior to today, only 7 were more than 17.1% above the midpoint. As a group they did quite well.

Also, the final offer price of $24.00 is higher than or equal to all but 5 of the offer prices of the 46 IPO's I've done. And the five that are higher again did quite well overall.

So those two items gave me more confidence in doing this as a quick trade, not a buy and hold.

Wife is happy- I netted $7,129.62 profit (2.8%) on 7,528 shares in 1 minute, 15 seconds. I'll take it.

[hobo finds]

Wow that's some quick cash! Congrats! I figure its like 142,592 pounds of scrap steel!

[Recyclersteve]

Wow that's some quick cash! Congrats! I figure its like 142,592 pounds of scrap steel!

It would take me a long time to lift (much less drive) 142,592 lbs. of anything. That said it was easier for me to lift my fingers long enough to click the mouse a few times!

[Recyclersteve]

ANATOMY OF A DISASTER (AKA- MY IPO FROM TODAY):

Today I did the MongoDB IPO and it was setting up to be an outstanding trade. It will probably be difficult to name everything that was going right for it, but I will at least capture most of it for you.

MongoDB (Ticker: MDB) is a company (HQ'ed in New York City) that has a No SQL (sequel, or structured query language) type database. Without all of the details- let me simplify. A normal type of database might list those who have purchased widgets from me. Joe Jones bought one on June 6, 2016 and paid $99.95 for it. Joe is from Anytown, USA and the widget was sold to him in a store near where he lives. Now, with No SQL (the more modern) type databases, I can also capture information such as Joe Jones posting a video of him with his widget on Instagram. That could actually be part of my database. That is just the beginning. Pretty cool technology. CNBC has had Mongo on their CNBC Disruptors list for four years now. Disruptors include companies like Uber, AirBNB and Pinterest. They are companies that are not yet publicly traded (unless they just began trading) that are changing the world and have yet to do IPO's.

I read reviews on MongoDB and they had lots of praise for the company. Also, being HQ'ed in New York meant they were right in the back yard of the financial capital of the world.

The stock had an initial offer range of $18-20. The range was then raised (fairly unusual) to $20-22. The final offer price was $24. All of this is very positive. The range being raised is excellent. The offer price being above the high end of the upwardly revised range is also very good. Then the stock opened this morning at $33.00. $24 being 26.3% above the $19 midpoint is very good. $33 being 73.7% above the midpoint is also very good.

I've noticed that the IPO's that open for trade in the third half hour of the day outperform those before and those after. Sure enough, this opened for trade at 10:50am EST. IPO's that open on a round number do significantly better than those that open on an odd number- this one opened at $33. Thursday IPO's are better than those from any other day of the week. What's more, October is the beginning of the best three month stretch of the year, by far.

The nearest comparison I have to this company was an IPO I traded on October 6, 2016 for Coupa Software (Ticker: COUP). For COUP I bet big and it paid off. Profit was $35,914.82 in 3 min., 25 seconds.

Needless to say, the planets were aligning nicely for this IPO and I was licking my chops. I decided to go in pretty aggressively and bought 10,528 shares at the opening price of $33.00. The offer price was $24, so my limit orders placed to buy the stock last night were at a limit of $52.56 or better. As soon as the stock opened at $33.00, I knew I owned it at that price.

Little did I know that the opening price of $33 would be the HIGHEST PRICE OF THE DAY. Originally it was posted that the high was $33.999, but that was revised to the $33 open. So the stock was down sharply right away. I held and sat and watched carefully for a bounce. The bounce never did materialize. The stock was down to $29.10 before rallying a bit. I held it till 1:03pm EST (2 hrs., 13 min.), which felt like a lifetime and sold at an average price of about $30.15. I would have stayed home longer to watch this trade as I was expecting a rally into the close of the day. However, at that point I had a commitment to teach some high school kids about, believe it or not, IPO's! The final damage on MDB was a whopping $30,874.87 loss. This was probably my 4th worst day in 20 years or so of trading.

By the way, I was right about the rally into the close. The stock closed the day at $32.07. If I got out at that price, my loss would have been about $9,800, a lot better than $30k+. Oh well, it wasn't meant to be.

Now how is this for weird. Last Thursday (October 12th) I traded the Cargurus (Ticker: CARG) IPO and made $12k in 12 minutes on the 12th day of the month.

Today was the 30th anniversary to the day of the big 1987 stock market crash. Wouldn't you know it, I lost $30k on the 30th anniversary. Numerologists would go crazy analyzing that.

Even with this huge loss and temporary setback, I have to look at the overall track record. 48 IPO's done in about 6 1/2 years and only three losses including today. That is an outstanding record, even though I don't feel so great right now. Also, I am playing with the house money at this point. But, of course, I don't want to be giving back house money!

Maybe I can set up a GoFundMe account to cover the loss!

[highroller4321]

Thank you for sharing your losses, as well as your wins!



Have you ever held an IPO longer then 24 hours?

[Recyclersteve]

I held a couple of them for two months or more, but that is unusual for me.

[Recyclersteve]

I did a couple IPO's this past week- made about $600 on SEND and lost about $2k on SAIL. Even though my overall record on IPO's is really good (46 profits and 4 losses), the dynamics appear to have changed a bit recently. Three of the four losses have been in the last 3 months (CSSE, MDB and SAIL). That, combined with my being retired now, means I need to re-evaluate the trading of IPO's. So you can disregard the previous bullish commentary I made on trading IPO's on Day 1.

I am still very, very bullish on the tender offers. Please see the separate thread on this. I don't know how to paste the link, but it was titled "Stock Opportunity- ~$300 Profit Or More Per Person" and was posted on 10/24/17.

[hobo finds]

I did a couple IPO's this past week- made about $600 on SEND and lost about $2k on SAIL. Even though my overall record on IPO's is really good (46 profits and 4 losses), the dynamics appear to have changed a bit recently. Three of the four losses have been in the last 3 months (CSSE, MDB and SAIL). That, combined with my being retired now, means I need to re-evaluate the trading of IPO's. So you can disregard the previous bullish commentary I made on trading IPO's on Day 1.

I am still very, very bullish on the tender offers. Please see the separate thread on this. I don't know how to paste the link, but it was titled "Stock Opportunity- ~$300 Profit Or More Per Person" and was posted on 10/24/17.

viewtopic.php?f=17&t=41456&p=320127#p320127

[Recyclersteve]

Thanks Hobo.

[JadeDragon]

There is not enough data to make sweeping generalizations. Weighted averages against minutes make little sense. Interesting info though. Some good info can be gleaned from past experience.

[highroller4321]

I did a couple IPO's this past week- made about $600 on SEND and lost about $2k on SAIL. Even though my overall record on IPO's is really good (46 profits and 4 losses), the dynamics appear to have changed a bit recently. Three of the four losses have been in the last 3 months (CSSE, MDB and SAIL). That, combined with my being retired now, means I need to re-evaluate the trading of IPO's. So you can disregard the previous bullish commentary I made on trading IPO's on Day 1.

I am still very, very bullish on the tender offers. Please see the separate thread on this. I don't know how to paste the link, but it was titled "Stock Opportunity- ~$300 Profit Or More Per Person" and was posted on 10/24/17.

Perhaps your retirement is giving you more of a feel to "need" to do an IPO instead of being more meticulous in the past?

Either way we appreciate your input and information.

[Recyclersteve]

I did a couple IPO's this past week- made about $600 on SEND and lost about $2k on SAIL. Even though my overall record on IPO's is really good (46 profits and 4 losses), the dynamics appear to have changed a bit recently. Three of the four losses have been in the last 3 months (CSSE, MDB and SAIL). That, combined with my being retired now, means I need to re-evaluate the trading of IPO's. So you can disregard the previous bullish commentary I made on trading IPO's on Day 1.

I am still very, very bullish on the tender offers. Please see the separate thread on this. I don't know how to paste the link, but it was titled "Stock Opportunity- ~$300 Profit Or More Per Person" and was posted on 10/24/17.

Perhaps your retirement is giving you more of a feel to "need" to do an IPO instead of being more meticulous in the past?

Either way we appreciate your input and information.

Interesting thought. I have more time to analyze things in depth, hence some of the commentary on this site. So I think I am, if anything, more meticulous than in the past. Nonetheless, I am anxious to do some trading, so perhaps subconsciously I have given a few borderline items the approval they wouldn't have gotten back when I was working full-time.

[highroller4321]

I hope nobody bought and held QD (Qudian Inc).

[Recyclersteve]

I didn't trade it, thankfully.