in exactly what order are people allowed to buy stock?

Question

I was hoping to buy some visa stock.  But by the time it will get to the open market, it will probably have jumped way up in price because of the hype.  I heard, that if you want to get it before the price jumps, you need to know somebody that can get it for you?  How does that work? are people within the company allowed to buy stock before it goes ipo?  can they buy for other people? generally how much time between ipo date and when they can buy it do they have?

djasking · Accepted Answer

It is generally not easy to get in on the IPO.  Your broker has to be part of the 'selling group' in order for you to be alloted any shares.  Online brokers are rarely part of the selling group.  If your broker is, you will have the opportunity to subsrcibe, but you may be allotted none, some, or all of the shares you were hoping for.  I have heard you chances are better if you are a high fee generating customer, but I can't say for sure.  

Insiders and employees may have been given shares early on in the company's history, some of them may be the shares being sold through the IPO, but generally there are many restrictions on when their shares can be sold. 

If the IPO is heavily hyped, 'oversubscribed' by 5-10x, it is easy to pay too much.  See Bx or HLYS which IPOed this year. 

My advice would be not to get too excited about the IPO.  There are good opportunities in the market regularly, too many to worry about missing them.  Patience usually pays off in the long run (I wish I took that advice more often).  Good Luck!

Yardbird · Answer

There are rules in place now to allow everyone equal access to IPO offerings. Ask your broker.

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in exactly what order are people allowed to buy stock?

2 Answers