I'm really interested in jumping in on an IPO. But my retirement advisors and bank do not offer a way to buy IPOs. How does one go about getting in on the purchase? Is there a minimum amount required to buy? Can an average schmo like me get it or do I need to be on "a list"?
Thanks!
Generally speaking it's pretty difficult. IPOs are a pretty risky investment (you only hear about the huge successes, not the ones that flop) and they often limit participation to experienced investors who have a better understanding of the risks. There are a limited number of shares available and they're often spoken for by the banks/etc that are involved in underwriting the IPO.
Sometimes "big" IPOs will feature small allotments of IPo shares available for "friends and family" of employees. Also, IPOs that are "late" may have a lot of employees with a lot of their past compensation tied up in vested stock options that they can't sell yet, and in that situation sometimes there are opportunities to buy those shares privately. Facebook's IPO included both of those things.
But in general I think statements like "I want to invest in an IPO" are missing the point -- that's just speculation without really knowing much of anything about the underlying company. You should be saying "I think the currently-private company XYZ is a great opportunity and I'd like to invest in it as soon as possible". Investing in a pre-IPO company should be a mechanism to get a great stock, not an end in and of itself.
The one I had in mind was actually Porsche. I know, dream big and I probably have no chance of buying 1% of a share but it got me thinking how to try.
Thanks for the advice codrus!
https://www.bankrate.com/investing/getting-in-on-an-initial-public-offering/
You'd need a taxable brokerage account and some luck
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