Make a Bundle, or Lose Your Shirt
Written: Jul 16 '02 (Updated Jul 16 '02)
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Pros: E-mail alerts and newsletter; Timely Info
Cons: Some research items are costly
The Bottom Line: This is a good site for IPO research
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| Bryan_Carey's Full Review: IPO.com |
Initial public offerings of stock are often met with much fanfare and anticipation. Many fast- growing companies began with an IPO that offered shares at a deeply discounted price when compared to what they are worth today. On the other hand, many IPO have been issued for companies that went bankrupt a short time later, making IPO’s among the riskiest investments you can buy.
If you like speculating in risky stocks of emerging companies, then IPO.com is a place that you should visit on the world wide web. This service was founded in 1997 and it keeps track of companies that are poised to go public for the first time with a new issuance of stock.
Features of This Service:
IPO.com is broken into five main sections:
Home Page- IPO.com’s home page is updated each day (or every few days, depending on the area) and it presents the latest news and events relating to initial public offerings of stock. There is a summary of the weekly IPO’s, featured reports from certain “top pick” companies, and breaking news regarding any important financial information at the present time (including non- IPO items).
Venture Capital- This section features articles on companies that have already gone public and are now in the phase of acquiring capital. The IPO itself generally results in a large sum of capital for corporate investment, but often it still isn’t enough. Many companies need additional financing through the use of debt. Venture Capital keeps the investor abreast on any other financing that the fledging IPO has acquired.
IPO’s- This is the meat and potatoes of the site. It includes information on any recent IPO activities, including companies that have already gone public as well as those that are on the verge of going public. There is a “Most Recent Pricings” and “Most Recent Filings” list that are both updated as more companies go public or file with the SEC to go public.
Secondaries- Just like its name suggests, this is an area where you can lookup facts regarding secondary offerings of stock. Included here are companies that have already made one public offering and now they have decided that a second offering of stock is necessary to raise the needed capital for expansion. IPO.com shows the most actively traded secondary issues, the top underwriting firms, a sector breakdown, and lists of companies that are on the verge of issuing a secondary stock offering.
Research Center- In this section, you can conduct a simple search for a company that has or is about to go public, or you can order some research reports. The cost of some of these reports is steep, so you had better be very serious about researching IPO’s before you click in this section. The Venture Capital Quarterly Report sells for about $300; the IPO Analyst Report retails for $250; and the Market Research Report sells for $700! I’m sure that many of these reports contain some very useful information, but I would think twice before I would pay this much money for financial information.
Other Services:
One free service that IPO.com offers is its e-mail alert system. You can signup to get e-mail sent to you showing the latest IPO Analyst Newsletter, the Venture Capital Dealwatch Newsletter, IPO status alerts, and IPO update alerts. IPO.com will deliver this information weekly or daily (depending on which of the four items you request) keeping you as up to date as possible on the latest IPO news.
Final Thoughts:
IPO.com is a handy on- line service for those who have an active interest in Initial Public Offerings of Stock. I have been using the e-mail alert system for quite some time. I have been reading the IPO alerts for more than a year now and I have seen an equal share of winners and losers pass through my e-mail inbox.
The information contained in IPO.com is timely and well- organized. They don’t necessarily update things every day, because much of the information doesn’t need to be updated that frequently. Rather, they update as more information becomes relevant. The exception would be the breaking news, on the main page. At the very least, this area gets updated each working day to reflect the latest stock- market closings.
Some of the premium services in this site can really cost you an arm and a leg, and I don’t know if they are really worth the money or not. I have not used any of these premium services myself, because I’m not really that actively involved in seeking out IPO’s and also because I don’t know if I could justify the high cost, even if I did make a large number of IPO purchases. I think these premium services are best left to institutions and other investment groups. I don’t think they are practical for an individual investor. You can find most any investment data that you need for free, somewhere in cyberspace, on almost any company.
IPO investments are a very risky business to get into, and you have to keep that in mind before you make any investments of this type. You could easily make 1000 percent or more on your investment, if you pick one of the winners. But you could also experience losses of 80, 90, even 100 percent if the company doesn’t pan out. It’s also very common to see IPO’s shoot up in price on the first few days, with bids for the stock far exceeded what the shares are really worth. After all the hype dies down, it’s common to see the price per share plummet to a fraction of its original value.
Overall, IPO.com is a very good service for the serious IPO investor. If you have even a slight interest in this area of investing, then I recommend logging on and signing up for the newsletter and alerts. IPO.com will keep you well informed of the latest news and offerings, tempting you to make a very speculative purchase of stock.
Recommended:
Yes
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