IPO Boru Hype

MoneyMaker · 1 IPO Boru Hype Thu Mar 24, 2011 12:43 pm

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I strongly feel that I could gain more money from the market which is down than block my money in an IPO where I wouldn’t even get my full allocation of shares.

Let me give you a personal example:
Investment amount Rs 1M
Gave me 2700 share of BFL @ 370 when the market dropped
I sold It at 425/- When BFL had their rally few days ago
I made 148,500/- (within a week)

This was the same time the Free Lanka trading IPO was about to close. And If I had invested in the IPO
Investment amount 1M
Would have applied for 200,000 shares @ Rs 5, but I would have roughly been allocated 30% which would be 60,000 shares.
Assuming that the Free Lanka shares trade at Rs 7 in the 1st week of trading
I would make 120,000/-

It is definitely a risk and an opportunity cost at the same time. But what is important to note is, I have my money back with a profit in a shorter period and can look for more opportunities like Brown which I bought at 260/- and sold today for 285/-. So I am questioning the hype of IPO’s. May be I was lucky but still is it worth to invest in IPO’s and block my money for more than a month or to look for opportunities like I did? Then again may be this opportunity does not happen all the time.

There is always two schools of thought to this.

Different people have different opinions but this is mine, your valuable thoughts are appreciated.

Justification required for negative reps. Evil or Very Mad

Last edited by MoneyMaker on Fri Mar 25, 2011 8:25 am; edited 1 time in total

Sasanka De Silva · 2 Re: IPO Boru Hype Thu Mar 24, 2011 1:02 pm

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Agree taotally. Laughing

MoneyMaker · 3 Re: IPO Boru Hype Fri Mar 25, 2011 8:31 am

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Thanks

DeAmO · 4 Re: IPO Boru Hype Fri Mar 25, 2011 10:10 am

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I think this unprecedented stream of IPOs is a golden opportunity for "new investors" such as myself to get a feeling of the equity market. No doubt, my goal is to eventually build a high-value portfolio... but I, although I am on a steep learning curve, still lack the necessary experience to "play" the market to end up in the black more often than not. So for persons such as myself, the IPOs are a good thing!! Laughing

supun.perera · 5 Re: IPO Boru Hype Fri Mar 25, 2011 10:25 am

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thank you MoneyMaker for sharing your view on IPOs.

From a pure logical point of view, you are 100% correct and I agree with you. As a seasoned player, you have learned to suppress the emotional attachments when it comes to trading. This is one of the KEY parameters which differentiates pros and newbies.

However, a vast majority of the newbies are emotional about trading. It is part of the learning curve. For such newbies, its always "comforting" to go for IPOs as there is a higher probability of the IPO being oversubscribing (which gives the illusion of high demand) and a high probability of the price going north on the first trading day itself.

These people are used to deposit money in a FD and wait 1 year to get 10% (by that time, inflation has caught up and there is a nett loss). So investing in an IPO and waiting for 1 month to get possibly 20% or more is a HUGE improvement for them.

Mind you, the required change in the mindset (to look towards "risky" forms of investment) is quite drastic. With a higher probability of profit plus the hype created before the IPO, it makes this transition easier for the rookies.

In short, I see IPOs as entry-points to the share market for newbies. Seasoned players are better off following your advise. For the real big players (ie who submit bank guarantees for the entire offer), well... I have no idea... may be they want to show off

This is my personal view on IPOs. ;)

MoneyMaker · 6 Re: IPO Boru Hype Fri Mar 25, 2011 11:57 am

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A coward has given me a negative rep!! when I have clearly stated that to justify why? if one decides to give me a negative rep.

Admin team,
The - rep is going to keep people with valuable thoughts away from this forum if there is no changes made to this.

Rajitha · 7 Re: IPO Boru Hype Fri Mar 25, 2011 12:11 pm

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There is no Boru Hype about IPOs and the past few IPOs are a testament to it!
How can you say you only get allocated only 30% of the allocated amount when they have not yet even posted about the allocations? Also how can you judge the price to make an comparison with a share you got lucky?
Also the shares at dirt cheap prices liek last week will not be like that for ever? What then ?
Not to mention its you own fault if you applied for soo many shares and might not get them! Same as some idiot buying WAPO at rs 1500 rights or shares after right issue is over!
For example at singer IPO as I can remember over 50% people who applied for were fully alloted with shares and they were able to sell their shares at over 300% profit in 1 day! how many stable shares appreciated that much in such small time?
Also how can you grantee share you buy will go up so fast? How about the other investments you made except BFL? did they also give you same amount of return in such short term ?
Also what happed to people who bought you BFL shares at rs 425 last day from you! They now have about Rs 20 loss for more days than you!
Also you think any newcomer can easily pick good stocks?
There are many reasons why IPOS are great ans specially in the current SL market! Only disagreeing are the people who have no cash to invest on them or people who want to invest millions with bank grantees and don't want the others to apply as it will spoil their chances of greater allotment!

kavi84 · 8 Re: IPO Boru Hype Fri Mar 25, 2011 12:32 pm

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Good point Rajitha Very Happy

MoneyMaker · 9 Re: IPO Boru Hype Fri Mar 25, 2011 2:41 pm

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Rajitha: There is no Boru Hype about IPOs and the past few IPOs are a testament to it!
How can you say you only get allocated only 30% of the allocated amount when they have not yet even posted about the allocations? Also how can you judge the price to make an comparison with a share you got lucky?

MoneyMaker: Let’s take the Union bank allocation for example: People who applied upto 5000 shares were only allocated 100 shares which is a mere 2%.
The 30% figure was a rough estimation. Will comment further once the allocations are finalized.

Rajitha: Also the shares at dirt cheap prices like last week will not be like that forever? What then?

MoneyMaker: May be I was lucky but still is it worth to invest in IPO’s and block my money for more than a month or to look for opportunities like I did? Then again may be this opportunity does not happen all the time.

Rajitha: Not to mention its you own fault if you applied for soo many shares and might not get them! Same as some idiot buying WAPO at rs 1500 rights or shares after right issue is over!

MoenyMaker: I have clearly mentioned a monetary allocation of 1M if I was to invest in either, READ MY ARTICLE AGAIN IF YOU DID NOT UNDERSTAND

Rajitha: For example at singer IPO as I can remember over 50% people who applied for were fully alloted with shares and they were able to sell their shares at over 300% profit in 1 day! how many stable shares appreciated that much in such small time?

MoenyMaker: Your above example was a one off case. My article was solely aimed at the time during the Free Lanka IPO closing date where the market was also down at the time.

Rajitha: Also how can you grantee share you buy will go up so fast? How about the other investments you made except BFL? did they also give you same amount of return in such short term ?

MoneyMaker: Yes it did, On Brown which I sold yesterday. There is no guarantee that any shares will go up fast, share prices at CSE rally most of the time without reason.

Rajitha: Also what happed to people who bought you BFL shares at rs 425 last day from you! They now have about Rs 20 loss for more days than you!

MoneyMaker: Again a very childish comment because I was talking about a personal experience, if your thoughts are in line with the above sentence the share market is not for you. If you’re not willing to take losses stay out of it.

Rajitha: Also you think any newcomer can easily pick good stocks?

MoneyMaker: Agreed on your point here. New comers need to do their research prior to investing.

Rajitha: There are many reasons why IPOS are great ans specially in the current SL market! Only disagreeing are the people who have no cash to invest on them or people who want to invest millions with bank grantees and don't want the others to apply as it will spoil their chances of greater allotment!

MoneyMaker: This is a stupid statement. It’s obvious that IPO’s have its pros and cons. And my article is one aspect of it.

Conclusion:
Rajitha make sure you read the articles on this forum 1st from the writers aspect and not from your narrow mind. Make sure you clearly understand the sentences before you could give your comments. In order for you to counter argue, make sure you understand the article. If English is the issue please join the Sinhalese or Tamil forum.
Thanks.

Rajitha · 10 Re: IPO Boru Hype Fri Mar 25, 2011 2:54 pm

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LOL man I have a Masters degree from University of Nottingham and I'm a Lecturer so my English is fine! It’s yours you should worry about!

Union bank had a huge over subscription which was not the case with last IPO or with all IPOS which you seem to have generalized! Also for Union bank who applied for 100 shares got 100 shares! Who told you to go apply for more?

According to you then the title should be
" Hay look I made more money investing in a stock and getting lucky than what I MIGHT earn from IPOs" Learn to paraphrase the heading first!

According to you a person who invested in WAPO and made millions in one day should never trade on any other share because it gave him great returns! The headings of them should look like IPOS and all others shares except WAPO are over Hyped!

abc · 11 Re: IPO Boru Hype Fri Mar 25, 2011 3:04 pm

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Rajitha wrote:LOL man I have a Masters degree from University of Nottingham and I'm a Lecturer so my English is fine! It’s yours you should worry about!

Union bank had a huge over subscription which was not the case with last IPO or with all IPOS which you seem to have generalized! Also for Union bank who applied for 100 shares got 100 shares! Who told you to go apply for more?

According to you then the title should be
" Hay look I made more money investing in a stock and getting lucky than what I MIGHT earn from IPOs" Learn to paraphrase the heading first!

According to you a person who invested in WAPO and made millions in one day should never trade on any other share because it gave him great returns! The headings of them should look like IPOS and all others shares except WAPO are over Hyped!

To the best of my knowledge there is no Montessori in UK called "University of Nottingham".
lol!

MoneyMaker · 12 Re: IPO Boru Hype Fri Mar 25, 2011 3:19 pm

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Rajitha wrote:LOL man I have a Masters degree from University of Nottingham and I'm a Lecturer so my English is fine! It’s yours you should worry about!

Union bank had a huge over subscription which was not the case with last IPO or with all IPOS which you seem to have generalized! Also for Union bank who applied for 100 shares got 100 shares! Who told you to go apply for more?

According to you then the title should be
" Hay look I made more money investing in a stock and getting lucky than what I MIGHT earn from IPOs" Learn to paraphrase the heading first!

According to you a person who invested in WAPO and made millions in one day should never trade on any other share because it gave him great returns! The headings of them should look like IPOS and all others shares except WAPO are over Hyped!

Good Luck to your students! I am honestly finding it difficult to believe that you wrote that response as the sentence structures are very different. Did you get one of your students to type this response or did you ask your dad?

I honestly don't care about your qualifications or your university

IPO's are overly hiped but good for people who are new to the market and for individuals with a limited capital.
[i]

nathanfornash · 13 Re: IPO Boru Hype Sun Mar 27, 2011 6:01 pm

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Agree 100%. IPOs are probably OK as the demand can jack the share up in the first couple of days. However it may always come down lower than the IPO price which would be a better time to buy, based on the growth prospects and also once there is a better financial history on the company.

Fresher · 14 Re: IPO Boru Hype Sun Mar 27, 2011 6:44 pm

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This is my view.
Times have changed. IPOs may have been hyped (I entered the market a little less than one year ago) and they were yielding good results.
Then you see, the entry barrier to the market is almost nil. So looking at the attractiveness more and more started applying and there was huge demand for every IPO.

One must realise understand in these circumstances that you cannot get more than the allotted amount since there are many many more people who applied so everyone must get an equal share.

Anyway, now it seems to have settle down. It also depends on the issue size.

But now with the new rule of the retail investor category, the situation will be much better i suppose. Anyways you cannot expect the market to move riduculously everyday. IPO's if in demand will generally bring you a profit. It may not be the high since the risk generally is low.
You can get a higher return from the market since you take a higher risk!

nathanfornash · 15 Re: IPO Boru Hype Sun Apr 24, 2011 1:47 pm

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As promised earlier, the Free Lanka Trading IPO has proven more truth to IPO boru hype. Smile

Rocky · 16 Re: IPO Boru Hype Sun Apr 24, 2011 5:01 pm

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Hey you guys, lets not waste a Sunday evening on altercations like these.

We have a heavy day tomorrow and your energies can be diverted in that direction.
Each one has his / her opinion and they can state it as such and not as a fact.

Those with better capabilities can explain things in a calm manner for the betterment of this forum and ensure proper decorum is maintained always.

Appreciate all your inputs.

UKboy · 17 Re: IPO Boru Hype Sun Apr 24, 2011 5:56 pm

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hybrid_OS wrote:Hey you guys, lets not waste a Sunday evening on altercations like these.

We have a heavy day tomorrow and your energies can be diverted in that direction.
Each one has his / her opinion and they can state it as such and not as a fact.

Those with better capabilities can explain things in a calm manner for the betterment of this forum and ensure proper decorum is maintained always.

Appreciate all your inputs.

True

In general........ day by day IPOs are getting less favorite with retailors but if we check the HIstory of IPOs you can see that IPOs will give mix results. Some IPOs took ages before give benefits to their investors.

DIAL - IPO price Rs 15 went up to Rs 28. & now Rs 10
LIOC - IPO price Rs 24 went up to Rs 55 & now Rs 18.
LGL- IPO price Rs 24 went down to Rs 22 before aggressively reached Rs 55 & now Rs 43.
SLTL- IPO Rs 14 prices didnt move for long time and now its Rs 56
SIRA - IPO price Rs 3.00 went down and stagnated for long before reach Rs 5+ level.
HDFC IPO price Rs 220 & went up immediately and then down to Rs 60 - 50 level and finally now price has risen to Rs 1150..!!

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IPO Boru Hype

1 IPO Boru Hype Thu Mar 24, 2011 12:43 pm

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2 Re: IPO Boru Hype Thu Mar 24, 2011 1:02 pm

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3 Re: IPO Boru Hype Fri Mar 25, 2011 8:31 am

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4 Re: IPO Boru Hype Fri Mar 25, 2011 10:10 am

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5 Re: IPO Boru Hype Fri Mar 25, 2011 10:25 am

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6 Re: IPO Boru Hype Fri Mar 25, 2011 11:57 am

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7 Re: IPO Boru Hype Fri Mar 25, 2011 12:11 pm

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9 Re: IPO Boru Hype Fri Mar 25, 2011 2:41 pm

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14 Re: IPO Boru Hype Sun Mar 27, 2011 6:44 pm

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