Unique IPO strategy?

[pspr]

Stocks do trade under a penny. They can trade in mils. Ever heard of the "Pink Sheets"? that's where you will find them.

 

[blb078]

Quote from vhehn:



ipos dont always sell out on the first day. if the underwriter is big enough he will hold the price until they float all the shares.
i didnt say google would do a billion share ipo but under the right circumstances it could be pulled off.

once again it comes to simple supply & demand, there would have to be a daily volume of 3,4,5 billion shares to do something like that, take a look at all of the spinoffs of other companies, these spinoffs were just as big as google, nothing like that happened, it doesn't make good business sense, lower the shares offered raise the offering price, that way they can get the float out, then in a few months or whatever, they split or do a secondary offering.

 

[blb078]

Quote from pspr:

Stocks do trade under a penny. They can trade in mils. Ever heard of the "Pink Sheets"? that's where you will find them.

no one here isn't saying stocks under .01 don't trade in a mill+, were talking about doing a billion dollar ipo,

 

[TheStudent]

Quote from garfangle:

Let's say a company wants an IPO for its stock. However, instead of pricing it at $10 and issuing 1 billion shares for a market cap of $10B, it is priced at $.01 and 1 TRILLION shares are issued (or at the lowest possible initial trading price). That way the stock can never fall without being worth zero, and the stock has only an upside (initially). Meaning, a trade from $.01 to $.02 means that the company has instantly doubled its "worth." It would only need to appreciate 99 cents to be the first trillion dollar company.

Well, this is simply not the way the capital markets work.

It's clever, in a hand waving sort of way, but clever doesn't cut mustard when it comes to getting the attention of cold hard cash.

 

[pspr]

Quote from blb078:



no one here isn't saying stocks under .01 don't trade in a mill+, were talking about doing a billion dollar ipo,

I believe the thread's author stated that if it went public at 1 cent it could only go up. That isn't true and most likely wouldn't happen.

 

[blb078]

Quote from pspr:



I believe the thread's author stated that if it went public at 1 cent it could only go up. That isn't true and most likely wouldn't happen.

i see what you're saying, i don't think he ment pink sheets, i think he ment a traditional ipo through GS, Merrill etc.

 

[jaan]

Quote from garfangle:
it is priced at $.01 and 1 TRILLION shares are issued (or at the lowest possible initial trading price). That way the stock can never fall without being worth zero, and the stock has only an upside (initially).

nice try, but no cigar.

even if you would find an exchange that would allow such IPO price (which you won't), what would basically happen is that once the real value of those shares falls below $.01, nobody would buy those shares from you, so the stock volume would go to 0. then you would be just sitting on your shares, wishing there was a way to sell those shares for less than $0.01.

you see, the value of a security is not what's written on it (or your computer screen) -- it's what others are willing to pay for it.

- jaan

 

[garfangle]

Quote from jaan:

nice try, but no cigar.

even if you would find an exchange that would allow such IPO price (which you won't), what would basically happen is that once the real value of those shares falls below $.01, nobody would buy those shares from you, so the stock volume would go to 0. then you would be just sitting on your shares, wishing there was a way to sell those shares for less than $0.01.

you see, the value of a security is not what's written on it (or your computer screen) -- it's what others are willing to pay for it.

- jaan

I am not talking about an illusionary fly-by-nighter (see ZZZ Best), but if a solid company did it this way: a Google, a UPS, et al.

 

[G_Morgan]

1) you don't have to trade in full cents.
2) a transaction cost premium would be applied.
3) people will not overpay, even if the per share cost is low.

 

[stock777]

You have just earned the dumbest idea Award of the month!!!

:eek: :eek: