Paradoxically, the trying economic conditions over the past several years have been perfect for super-rich and connected investors — the top 1% of the 1% — to exponentially increase their wealth. #-ad_banner-#One of the more popular but seldom talked-about tactics is known as IPO flipping. This refers to the practice of buying IPO shares at the initial offered price then quickly reselling them once the shares start trading — and profiting from the initial pop. However, only institutions, hedge funds and very wealthy investors are allocated shares by the underwriting broker before the IPO. Even though most regular investors are… Read More
Paradoxically, the trying economic conditions over the past several years have been perfect for super-rich and connected investors — the top 1% of the 1% — to exponentially increase their wealth. #-ad_banner-#One of the more popular but seldom talked-about tactics is known as IPO flipping. This refers to the practice of buying IPO shares at the initial offered price then quickly reselling them once the shares start trading — and profiting from the initial pop. However, only institutions, hedge funds and very wealthy investors are allocated shares by the underwriting broker before the IPO. Even though most regular investors are precluded from IPO flipping, they can still learn a profitable lesson — never purchase an IPO on the first day of trading. Sure, it’s tempting to buy a newly issued stock as prices rocket higher that first day — but share prices often retreat just as quickly. This is because the flippers are dumping their often substantial allocations as the public is trying to scoop up shares. Last year saw the most IPOs since the height of the dot-com bubble in 2000, and the surge in IPOs is showing no signs of abating this year. As of February, IPO filings… Read More