Allocation coming today...questions to consider...

Posts: 11 · Vonage Forum Associate Joined: May 20, 2006 Posts: 11

So...sometime today we will be allocated shares. Big question for those who have done IPO's before, what are we looking for?? Smile

And what do I mean by that?! I've requested 4,000 shares as a background info to this post.

If I receive 4,000 shares and it doesn't price $18 or above, I may actually have second thoughts about buying. What I would like to see (best care scenerio in my opinion), I recieve maybe 1,000 (or less) shares and it prices at $18/$19. If that happens, very good chance of excellent price appreciation tomorrow. If I recieve anything over 1,000 shares and it prices at $16/$17, I don't feel very good about tomorrow.

Just my opinion. But based on IPO I have participated in in the last 7/8 years, that's my guess. Thoughts?? We'll see!!

-Mark

Posts: 88 · Posted: Mon May 22, 2006 10:18 am Post subject:

I think you're a day ahead of yourself.

Posts: 11 · Vonage Forum Associate Joined: May 20, 2006 Posts: 11

I am, long weekend. Same post, plus a day. Smile

-Mark

Posts: 243 · Vonage Forum Master Joined: Jan 18, 2004 Posts: 243

By Steve Gelsi
Last Update: 1:34 PM ET May 22, 2006

NEW YORK (MarketWatch) -- Wednesday's initial public offering from Vonage is multiple times oversubscribed, theflyonthewall.com said Monday. The Web site said it expects the IPO to price at the $17-$18 level. The Internet phone specialist will price the offer of 31.25 million shares Tuesday night. The estimated price range is $16-$18 a share. At the midpoint of the range, the IPO will raise about $531 million.

Posts: 243 · Vonage Forum Master Joined: Jan 18, 2004 Posts: 243

skivrmt wrote:

If I receive 4,000 shares and it doesn't price $18 or above, I may actually have second thoughts about buying.-Mark

skivrmt,
You do realize that once the price is set whatever your allocation of shares comes out to be your obligated to pay for those shares. You can't change your mind once the price is set and the shares are allocated. You have to assume that if you offered to buy 4000 shares that it will price at the top of the range and you'll need to pay for those shares at that price. The only exception is if the price falls below the 16-18 or prices above 18 at which point your old offer is voided and you'll have to submit a new offer at the new range.

Posts: 4 · New Forum Member Joined: May 22, 2006 Posts: 4

Mark,

Being a first timer participating in an IPO, I was wondering if you would advise me regarding a loss protection strategy.

Is the stop market or stop limit a better method?

I am thinking a trigger of -10%. Thanks! Jim

Posts: 243 · Vonage Forum Master Joined: Jan 18, 2004 Posts: 243

Don't mean to hijack the thread because you asked for someone elses opinion... There is no such thing as a Stop Market. If you sell at market your selling at the market price at the time your order is executed.

A stop Loss or limit order is used when you want to set the price that you'll sell your shares at and not lower than. You should always use limit orders no matter if your getting into or getting out of a stock.

As for a good limit... personally a 25% percent increase is a good point for me to get out. Unless I'm holding long. It is all a matter of personal preference and risk tolerance.

Posts: 2 · New Forum Member Joined: May 22, 2006 Posts: 2

This process is slow and very difficult to predict. What is the opening price going to be? What day will it actually IPO? When can I fund the account? When can I link to the account? When will the messages on the IPO relate to price, date, or funding?

Posts: 243 · Vonage Forum Master Joined: Jan 18, 2004 Posts: 243

Read the FAQ on the DSP site.

Posts: 11 · Vonage Forum Associate Joined: May 20, 2006 Posts: 11

Gfoulks, you are absolutely correct. After re-reading my post, I see how I sounded like I could bail after receiving an allocation (not a very good writer!). I apologize to anyone who read it that way. When I meant buying, I meant more of holding per say. If they price this at $16 and I receive 4,000 shares, I'm dumping on open, almost no matter what. If they price this at $18 or above, depending on my allocation, I'll probably be holding for a bit. Whether that bit is hours, days, or months, who knows.

Regarding the other posters question about a stop loss, I would not recommend it for an IPO. I can think of two somewhat recent IPO's on why. Burger King and Bidu. Burker King dropped almost immediately below the opening price and then slowly came back had a decent day. Bidu was a little different obviously, but it opened in the 80's, and then within 10 minutes dropped to the mid 60's before running to ~$150. What this means?! Basically, expect a very volatile day with probably 20MM+ shares being traded.

Good luck to all and again sorry gfoulks and thank you for clarifying!

-Mark

PS - and with the recent article, if true, about multiple times oversubscribed, hopefully this will be moot