IB (IBKR) IPO auction

IB are market makers, and also have very few junk accounts. Brokerages like AMTD have tons of ppl with junk accounts under 5K that barely generate any commissions. IB squeezes these people out by having minimum activity fees, a 5K minimum deposit, and charging you for even basic quotes unless you generate $30 in commission (which is VERY reasonable, since any active trader will generate $30 in commission in a few days)
 
There is only 20 million shares available to the general public. That is very very small, and can lead to rapid price appreciation - as you know, supply and demand.

Look at the float of their competitors:

Ameritrade 482.56million
Etrade 421.7m
Knight securities 98.8
AG Edwards 74.3m
Goldman Sachs 349.2m

So from a technical perspective, this stock can easily be subject to manipulation - for better or worse. It can be $30 in a week.

However unlike other IPO's, you do not have to worry that the insiders will flood the market and sell their shares immediately.

I rate this a cautious buy at $21
 
Very true, the one main insider will own 95% of the company, and his share arn't going anywhere.

Plus I think the dutch auction system gaurentees no gap-down on the first day. An IPO priced in other ways may be overpriced.

An IPO sold dutch auction style.. gets sold to all bidders at the lowest price. That means the bidders who bidded more will probably want to buy more shares when the IPO opens up for trading. A lot of people might say "I want an XXXXX$ investment in this company" and if they happen to get filled at the auction cheaper then expected, they might buy shares at the open.

Of course, there's always flipper risk.. if the price doesn't start moving up when the people who intend to flip the IPO want to sell, that might push the price down due to panic selling.

Anyway, I'm in for a few hundred shares, cuz I think i can make 10 - 20% on the first day flipping it.
 
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