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Does Visa Hit The Market for Trading Tomorrow?
- Thread starter BlueStreek
- Start date
This is a hot and hyped stock backed by a very profitable company that is not tainted by the current subprime mess, usually those type of stock does run up a bit in the first few days, ie: goog, vmw.
It all depends on the initial price, if <50 i think it's a good deal, >70 no, anything in between good for daytrading with tight stop.
trendlover,
visa -> investment bank (jpm, gs) -> institutional clients + high net worth (think of them as the bank's friends) -> sell at market price tomorrow -> YOU
Although perfectly legal, it's well understood between the banks and institutional clients that you do not dump all your ipo shares on first day unless under extreme panic situation, usually hold it for a few months at min. Otherwise risk pissing off the banks and not receiving any ipo in the future. So it's not like someone suggested you will see 400 million shares dumped at open.
Also the banks price the share so it's not too cheap (avoid a huge gap up which will result in a major crash due to profit taking), and also not too expensive to avoid a downtrend at the get go. They also try to constantly adjust the stock price so it' goes up a bit but not too much after the ipo.
Basically the banks make sure the stock is stable and doesnt crash the first few weeks, then after that all hands off and up to the company. At least the good banks like gs, jpm etc.. That's why when buying ipo stocks, it's critical to see who the underwriters are. If you get some noname crap bank like the ones that wrote a lot of chinese stocks, you need to be very cautious.
It all depends on the initial price, if <50 i think it's a good deal, >70 no, anything in between good for daytrading with tight stop.
trendlover,
visa -> investment bank (jpm, gs) -> institutional clients + high net worth (think of them as the bank's friends) -> sell at market price tomorrow -> YOU
Although perfectly legal, it's well understood between the banks and institutional clients that you do not dump all your ipo shares on first day unless under extreme panic situation, usually hold it for a few months at min. Otherwise risk pissing off the banks and not receiving any ipo in the future. So it's not like someone suggested you will see 400 million shares dumped at open.
Also the banks price the share so it's not too cheap (avoid a huge gap up which will result in a major crash due to profit taking), and also not too expensive to avoid a downtrend at the get go. They also try to constantly adjust the stock price so it' goes up a bit but not too much after the ipo.
Basically the banks make sure the stock is stable and doesnt crash the first few weeks, then after that all hands off and up to the company. At least the good banks like gs, jpm etc.. That's why when buying ipo stocks, it's critical to see who the underwriters are. If you get some noname crap bank like the ones that wrote a lot of chinese stocks, you need to be very cautious.
Quote from Surdo:
You just do not get it....do you?.....The banks are not selling it!
Insitutions and day traders are the sellers, I told you THREE times, the underwriters JPM and GS do not trade it from inventory on the opening. What makes you qualified to decide if it is over/undervalued at $44, the market decides price.
I am done, buy a book on IPO's please.
I DO understand JP AND GS are not selling from THIER inventory.
They pass along to institutions. These instituitions (which are banks) then see what they can make from the traders.
The 44 dollars is what VISA will pocket no matter how the share trades. I am not putting a value on the share, I am stating the price VISA will be guaranteed no matter what the market decides.
Yes Surdo, I will by a book and study ipo more. You have been patient. Much appreiated!
Quote from newguy05:
This is a hot and hyped stock backed by a very profitable company that is not tainted by the current subprime mess, usually those type of stock does run up a bit in the first few days, ie: goog, vmw.
It all depends on the initial price, if <50 i think it's a good deal, >70 no, anything in between good for daytrading with tight stop.
trendlover,
visa -> investment bank (jpm, gs) -> institutional clients + high net worth (think of them as the bank's friends) -> sell at market price tomorrow -> YOU
Although perfectly legal, it's well understood between the banks and institutional clients that you do not dump all your ipo shares on first day unless under extreme panic situation, usually hold it for a few months at min. Otherwise risk pissing off the banks and not receiving any ipo in the future. So it's not like someone suggested you will see 400 million shares dumped at open.
Also the banks price the share so it's not too cheap (avoid a huge gap up which will result in a major crash due to profit taking), and also not too expensive to avoid a downtrend at the get go. They also try to constantly adjust the stock price so it' goes up a bit but not too much after the ipo.
Basically the banks make sure the stock is stable and doesnt crash the first few weeks, then after that all hands off and up to the company. At least the good banks like gs, jpm etc.. That's why when buying ipo stocks, it's critical to see who the underwriters are. If you get some noname crap bank like the ones that wrote a lot of chinese stocks, you need to be very cautious.
That is very good advice. When I have a better grasp on trading over time, I hope I can return the favor to you.
Visa receives $44 per share less selling expenses....
many institutional investors bought this IPO....
they like the fact that it has a large float....able to place a lot of money on one transaction with good upside....20 million shares only 5% of float...
Underwriters went around on "road show" to meet with many investors.....investor fills out a "deal sheet" saying how many shares and what price they willing to pay.....Visa and bankers get together and try to average price/allocation as fairly as possible
shares will placed in accounts tomorrow morning right after open...NYSE stock so should open very quickly...route a "market" order to NYSE and shoud be OK with decent price....
SteveD
many institutional investors bought this IPO....
they like the fact that it has a large float....able to place a lot of money on one transaction with good upside....20 million shares only 5% of float...
Underwriters went around on "road show" to meet with many investors.....investor fills out a "deal sheet" saying how many shares and what price they willing to pay.....Visa and bankers get together and try to average price/allocation as fairly as possible
shares will placed in accounts tomorrow morning right after open...NYSE stock so should open very quickly...route a "market" order to NYSE and shoud be OK with decent price....
SteveD