Etrade question

I opened an account and I've gotten this message twice. 
 

Does this mean that my purchase won't go through?  I'm not having much luck finding an answer on the site. 

They aren't going to let you trade the security selected. 

Depending on what the security is you may not have all the proper paperwork filled out or they won't let you trade it due to having a newer account. 

It could even relate to the type of trade, if you put it in as a market order, instead of a limit order, after hours they could also do that. 

1. What is the security? There may be an issue with the stock itself, sometimes platforms or even governments will put a stop to their trading, such as Gamestop earlier this year. The more common situation would be during earnings calls, often times premarket or post market trading is stopped until the open.
2. What type of order? Limit order, stop order, market order... With this, what time of day are you putting the order in? Is trading active? 
3. Have you tried their customer support chat, assuming they have one? Or called their number?

Rivien, I assumed if it went on sale today I could buy it. 

Wally (Forum Supporter) said:

Rivien, I assumed if it went on sale today I could buy it. 

Try it now. Markets only opened 13 minutes ago, but more likely it will be another hour or two. IPOs are weird; you won't get to buy the IPO, so you're waiting on it to be available with the retail brokerages - it isn't there yet. 

It is open for trading, FYI

Hi Wally,

Are you the proud owner of some RIVN...if so, mind telling us what you got in at?

In reply to RX Reven' :

I'm not Wally but I bought the top today, follow me for more money-losing strategies. 

In reply to RX Reven' :

I got it at 98.23. Given my luck I suppose they will close up by Friday. 

So far my first attempt is going well. I made enough this morning for a couple more shares. Expect the entire economy to collapse any minute.  

Wally (Forum Supporter) said:

So far my first attempt is going well. I made enough this morning for a couple more shares. Expect the entire economy to collapse any minute.  

Is there a defined exit strategy with this investment? Or just HODL?

For a little bit of generic background:

An IPO (Initial Public Offering) is a way for a company to raise capital (money) by selling ownership (shares). Public means the shares will be traded on the public market after the IPO - as opposed to a private (like venture capital) deal where the VC company will trade money for shares but does not plan to resell them publicly. 

However, there are a fair few steps that happen before the shares are sold 'publicly'. First step is the company going through the IPO finds a bank to back their IPO. The company and the bank work together to agree on the value of the company, and this along with the number of shares offered and the portion of the company being sold sets the IPO price. The bank will technically be the first person to buy the shares, and they will buy all of them first thing on IPO day. The bank will be the one to deposit the money into the company's bank account as one big lump sum. 

Once the bank and the company agree on a price, they start a 6-12 month process of going around to institutional investors and "pre-selling" the shares. Basically the bank wants to reduce its risk and resell the shares ASAP, so before the IPO ever happens, the bank is finding folks who will buy large swaths of shares day one. Often, the more shares the institutional investor agrees to buy, the better the deal they get. Obviously, the bank and the company have to work together to show the institutional investor that the company is worth MORE than its IPO price. 

So then, on IPO day, all these pre-set transactions have to happen first. The bank has to buy, then resell, and the institutional investors get to buy at their pre-approved prices. All these transactions happen before anyone starts selling on the open 'public' market. 

Hence, the delay, and also why public investors will not be able to buy at the 'IPO' price (the bank wants to make money first, and then the institutional investor wants their cut, both parties are unlikely to sell for a loss especially on day 1). The price a public investor pays on IPO day has nothing to do with how much the company gets - that was pegged at the IPO price, and the company doesn't get any extra if the price goes up after the initial transaction with the bank. A higher stock valuation does help them in other ways, but not via direct funding of capital. The company can only sell a share once. 

Thinking about IPOs, I wonder if it's possible to build a 'direct-to-public' IPO platform. You can imagine that before computers, the bank and the institutional investors were needed simply because the volume of transactions would be too hard to process in a timely fashion, and you need to be able to streamline advertising of shares and stuff. 

Now that many things can move to a 'direct' model, I think it's an interesting thought. Not that the banks or other institutional middlemen would be happy for you to cut them out however...

Robbie (Forum Supporter) said:

Thinking about IPOs, I wonder if it's possible to build a 'direct-to-public' IPO platform. You can imagine that before computers, the bank and the institutional investors were needed simply because the volume of transactions would be too hard to process in a timely fashion, and you need to be able to streamline advertising of shares and stuff. 

Now that many things can move to a 'direct' model, I think it's an interesting thought. Not that the banks or other institutional middlemen would be happy for you to cut them out however...

They kind of have that right now. Sort of. With RIVN, the IPO was offered to employees, then shares were offered to Morgan Stanley as well as Sofi customers. I'm not sure how much, and I know for Sofi there was some sort of lottery to see if you'd get in - and I don't know if you got in, how much you would be allowed to purchase. 

Interestingly, with Morgan Stanley at least, you had to select how much you were going to buy when the price was released on Tuesday night, but those people have until the 15th to get the funds in their account. Not quite sure how that works. 

Didn't rivian allow those on the waiting list for trucks to buy in?

STM317 said:

Wally (Forum Supporter) said:

So far my first attempt is going well. I made enough this morning for a couple more shares. Expect the entire economy to collapse any minute.  

Is there a defined exit strategy with this investment? Or just HODL?

I have no plans. This was found money, it sounded interesting and I'm learning as I go. Maybe it will take off and pay off my house, maybe it implodes. I'm making it up as I go along. 

In reply to Robbie (Forum Supporter) :

Thank you, that explains it very well. 

I screwed myself buying Tesla at the same time. I about broke even after two days. 

I'm not gonna pretend to understand stocks, especially tech stocks, but I like this one.

I was lucky enough to get in the IPO. Unfortunately I only had some play money to throw at it, but hopefully this continues for a long time. 
 

I have a few friends that work there. Their retirement just moved forward about 10-20 years. 

In reply to mtn :

Same for me. I'm too conservative to throw life-changing amounts at something like this, but it's fun and not every day you get to invest in a new American car company that might actually have a shot. 

mtn said:

I have a few friends that work there. Their retirement just moved forward about 10-20 years. 

Maybe.  Employees usually aren't allowed to sell any shares until six months after the IPO, and that's plenty of time for the market to get fickle about a stock with the kind of valuation that RIVN has.  Their market cap is double that of Ford, which is highly speculative at this point.

Not too bad so far. I tossed about $20K at it. Nothing huge but already up a good amount. See where the path takes it. It's going to be one to keep an eye on and not a passive investment. 

Easy come, easy go.