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Cobalt's IPO, which was announced a while back, will apparently be this week. The story itself has more information regarding the whole thing for Cobalt, and the market in general.
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WRONG. I have been in quite a few IPO's and when you are really IN on the IPO, you can't sell until the SEC lockout period ends. That period is usually about 6 months, at which point, if you work for the company you still can't sell all of it.
David, you're coming on pretty strong. Relax.
This is true if you work for the company involved in the IPO or its subsidaries, but it's different if you are going through a brokerage. While what you are saying is technically true, the reality is less black and white. If you participate in an IPO through a brokerage, they request that you hold your shares until specified period. They can't stop you, however, if you decide to sell before that.
For example, the following is taken from Waterhouse Securities IPO FAQ:
"How long should I hold shares I purchased in an IPO?
Registered customers who have track records for buying and holding IPO shares in their account beyond 60 days will have priority in future IPO offerings over other customers. TD Waterhouse encourages this buy-and-hold approach for IPO investing. Selling shares within the 60-day period may prevent your from participating in future IPO offerings. "
My accounts at E*Trade and WR Hambrect have similar sounding wording.
My point is that you can be "in" on an IPO and still sell on the same day as the IPO - it's just not encouraged.
No, I don't work for them... I have a brokerage account with WR Hambrect and they sent me an email last week saying that they were participating in the IPO. BTW, these are the same guys that are the lead underwriter in the "OpenIPO" of Andover.Net.
They still don't publicize that they use Linux, not because they are "ashamed" of it but because the simple fact is that they aren't a Linux-company.
Linux was not a -purpose- for them it was a tool (ie, a means to an end). If there was some other tool out there that was also "free" and Open Sourced, they very well might use it instead.
I know that they are very happy to get the Linux "buzz" in certain circles, but they have also made a point that they are a Server Appliance company, not a Linux company.
Exactly WHY are companies that are loosing money WORTH all this cash? (Hint: I don't really want to hear all about how the future will be better, and the losses will become profits.)
Every one in the CNN article showed a loss. 94,000 last year, 2.3 million this year and yet this is worth having an IPO over. Boggles MY mind.
I guess if the US government can run a shop where more money is spent than taken in, then why not every one else?
Exactly WHY are companies that are loosing money WORTH all this cash? (Hint: I don't really want to hear all about how the future will be better, and the losses will become profits.)
There are several things to consider when evaluating a company: the value of its trademark(s) and the value of it's intellectual property and physical property. And there is, of course, (cover your ears if you really don't want to hear this) the potential for future profits.
This is not always true. Actually a company i use to work for just a few months ago who are a.com and had there ipo this last summer opened very poorly. They opend at $10 (the price they sold to all of the employees) went to $12 once and have been hovering at about $6 for quite a while now. I'm just happy I didn't buy any when I had the chance.
It made it on the frontcover with the main stories... it's still there in fact. It got submitted at a "slow" time of day so other stories covered it up real quick.
I just "ported" a product to the new Cobalt x86-based system (it's basically RedHat 6.0), and it was very little effort for (what we hope will be) quite a big payoff. The biggest premium in the ISP/NSP world is rack space, and the prospect of having umpteen-gazillion servers in such a confined space is a great idea.
There are some cool technical folks working at Cobalt, and I hope they do well.
I'm biased, very much so, but in the case of Cobalt it's not quite the same as with a ".com" company.
Cobalt has physical real-world product. They aren't selling vaporware. They can show consistent growth both in revenue and in product line.
I'm not saying that they have a value of billions of dollars, but comparisons to some other IPOs over the last year or two where those companies with software or information-based (or worse, vapor-based) are really not fair.
It seems to me like a lot of people misunderstand what an IPO is.
--Umm yeah, so do you.
If you buy a stock when it balloons to 80 or so, you haven't bought into the IPO; you've bought shares from someone who applied for and got IPO shares for 15 each, and is now selling them to you for 80.
WRONG. I have been in quite a few IPO's and when you are really IN on the IPO, you can't sell until the SEC lockout period ends. That period is usually about 6 months, at which point, if you work for the company you still can't sell all of it.
The way to make money off these things is to watch for the announcements and apply as quickly as possible (you need to fill out a SEC form that says you aren't related to any officers of the company and you know stuff about the market).
--Umm, no. To do that, you need to be on the floor making trades. Since a chair on the exchange (NYSE) goes into the millions these days, I doubt you have one. Maybe you mean your broker does this, but you're still wrong. Your broker usually gets IN on the IPO months before the actual day. (if they can even get in at all)
If you are eligible, you can get shares pretty cheap (usually about 15 dollars) before trading starts.
What are you talking about? The IPO has nothing to do with the low price? It is just where the price starts. The price could start at $400 a share if they wanted. They would just offer a lower float as a result.
Then when it starts trading, if there is significant hype surrounding the company (always the case if it's posted on Slashdot) you'll be able to sell the shares for 5 times what you paid for them very early in the day.
Nope...not for a few months...otherwise everyone would do it.
If you don't get the actual IPO, don't bother trying to buy the stock.
Well, just tell your broker not to pay for than X dollars a share and you _should_ be safe.
If, however, you think the company will be a good long term investment, wait a while to see what happens the the price. It'll probably adjust to a normal price after a few days (a lot of people who get stuck with the stock at the end of the first day don't want to hold onto it).
I hereby predict that when MSFT hit 103 a couple(?) months ago, that will be its all time high. It will *NEVER* get higher.
If I'm right, it would be a no-brainer to short sell it. I'm seriously at least 85% sure on this, but I've gotten burned by short selling before, so I'm a little reluctant to act on my intuition...
More on topic, I think Cobalt should be a good buy, assuming it doesn't open at astronomical prices. I'll be watching it.
(Disclaimer: I'm not a licensed broker. This is not an official recommendation. Just my gut feeling. If you invest solely on this advice, you'll probably get screwed.)
I have bought stock through E*trade in the past, but only in stock that had existed for a while. Is there anything special about buying IPO stock, any restrictions?
The real problem with ipo's aside from the inherent risk factor of the stock market is the speed of trade execution. Large brokerages have the advantage, and by the time a normal person buys a stock like Cobalt, the price of 15 has balooned to 80, and then could drop back to something like 60, and you then lose money. I say, stick with companies whose future has little doubt like HP, IBM, Dell and others like Phillip Morris and General Electric. Play it safe.
Of course, buying into an IPO is risky business, no matter what all the "experts" who cleaned up on RHAT (having opened their E*Trade accounts the previous week) tell you.
Cobalt might be a good long-term. The idea of network appliances like the Cube could very well be the Next Big Thing -- boxes that serve web and don't do anything else are a fairly big step towards simplifying the information environment of a small to medium sized company. The fact that they're using Linux as an underpinning proves only that they know how to be frugal.
That said, we'll have to see how well they're managed before we declare them the next Cisco. What they manage for a line of follow-up products is the Big Question...
Of course, how biased are these 'experts'? Of course they'll buy stock of their own, tout it as the next big thing, get you to buy in, and sell off before it comes back down to market value (which it generally does, assuming it starts above market, of course!)
The golden rule with investing is: the higher the return, the higher the risk. IPOs may be a great way to make money in the short term. They may equally be a great way to get burnt. Examine your needs and wants and determine what type of company is best for you.
Let's clear this up: - Cobalt Networks [cobaltnetworks.com] makes "internet appliances"; makers of the all-cool "Qube" - tickets.com [tickets.com] and it's competitor Ticketmaster [ticketmaster.com] sell tickets to entertainment events.
In closing, If you don't know what you are talking about, don't say anything, you only clutter things up.
Sorry, please check out their financial situation. Microsoft is literally raking in millions of bucks. With this kind of revenue and growth, short-selling Microsoft is financial suicide. Gates, Ballmer and other MS executives will never allow MS stock to slump since MS completely depends on stock options-it is what's keeping those hordes of programmers there.
You might want to check out their past annual reports, and take a look at recommendations of Wall Street analysts covering the company.
We may not like some of their crappy software and business practices, but the stock price will continue going up since they are obviously doing very well financially. And this is not likely to change overnight. Things would probably be very different if it was the sentiment of Open Source geek community that was driving the stock market, rather than the logic of Wall Street MBA types looking at nothing other than actual numbers and sales figures.
Of course, the way tech stock IPO's have been going recently, it is probably not a bad bet.
Speaking of which, who wants to join in a business venture with me? We will buy a server, set it up, call the company networks.com, IPO, sell to a big company, and make a FORTUNE! Oh wait, I forgot, the company would have to lose money or it wouldn't be worth anything. Oh well.
You generally have to be one of: 1) Know somebody high in the company to give you some friends and family shares. 2) Have tons of wealth so your brokerage gives you some as a perk. 3) If, like E*trade, the brokerage has a lottery to give out shares, you are extremely lucky. 4) Work for the company to get stock options.
A large part of the revenue which these companies claim is based on an usual metric of worth that is very specific to the internet. Example: a site which is participating in a banner exchange network can claim revenue (and loss) based on the number of times their banner loads on the network. It is very weird... but it still makes sense.. it is part of the new economy.
They will do extremely well because they have the words "networks" in their name! Almost every IPO in the past few weeks with that name has gone sky high on their opening day. Hopefully some of this gain will be attributed to Linux and put it into the public eye even more. Now it is highly unlikely most of us will be able to profit from this gain but...depending on how prominent Linux is in this IPO, this will bring the other Linux companies into the public eye and boost their stocks a little bit. Of course this is all just my opinion and I could very well be wrong.
If you want fast execution on your orders, you have to pay for it. Thats the downside of using a discount brokerage. For fast execution, try a day trading brokerage like Datek [datek.com].
It seems to me like a lot of people misunderstand what an IPO is.
If you buy a stock when it balloons to 80 or so, you haven't bought into the IPO; you've bought shares from someone who applied for and got IPO shares for 15 each, and is now selling them to you for 80. The way to make money off these things is to watch for the announcements and apply as quickly as possible (you need to fill out a SEC form that says you aren't related to any officers of the company and you know stuff about the market). If you are eligible, you can get shares pretty cheap (usually about 15 dollars) before trading starts. Then when it starts trading, if there is significant hype surrounding the company (always the case if it's posted on Slashdot) you'll be able to sell the shares for 5 times what you paid for them very early in the day.
If you don't get the actual IPO, don't bother trying to buy the stock. If, however, you think the company will be a good long term investment, wait a while to see what happens the the price. It'll probably adjust to a normal price after a few days (a lot of people who get stuck with the stock at the end of the first day don't want to hold onto it).
Over here in the UK, free (as in beer) internet service providers are the big thing - every high street store is announcing one of its own, and there are lots of new companies with a free ISP as their sole business plan.
So, since it's now believed that computers magically generate money without customers needing to pay anything, perhaps Transmeta could be the firm semiconductor company to follow the trend by giving away their products?
OK, so we've got Red Hat, Cobalt, VA, and a while ago I heard rumours of Cygnus, too... now, if you ask me, all these small IPOs are only leading up to one thing...
Transmeta I P O
Yes, that's right. Transmeta's only real product will earn them millions of dollars in a matter of seconds, and it's only three little letters: IPO. No programmable chips, no anti-microsoft ultimate anything, just an IPO. We now know the truth.
Virgin Mobile (ie, a mobile phone company in the UK, branded by Branson's Virgin empire, but run by someone else (no doubt)) was valued at £1.36bn last week (by some firm in the City) - and the company hasn't got it's first subscriber yet, nor have they launched.
(Nor is there a link to a Virgin Mobile site from virgin.com... Oh well)
Granted, it's a slightly different scenario, where Virgin does have a pretty good past record in pulling things off (alright, ignore the trains and ignore their Body Shop rip-off), but still...
Re:There is a problem with IPO's (Score:1)
David, you're coming on pretty strong. Relax.
This is true if you work for the company involved in the IPO or its subsidaries, but it's different if you are going through a brokerage. While what you are saying is technically true, the reality is less black and white. If you participate in an IPO through a brokerage, they request that you hold your shares until specified period. They can't stop you, however, if you decide to sell before that.
For example, the following is taken from Waterhouse Securities IPO FAQ:
"How long should I hold shares I purchased in an IPO?
Registered customers who have track records for buying and holding IPO shares in their account beyond 60 days will have priority in future IPO offerings over other customers. TD Waterhouse encourages this buy-and-hold approach for IPO investing. Selling shares within the 60-day period may prevent your from participating in future IPO offerings. "
My accounts at E*Trade and WR Hambrect have similar sounding wording.
My point is that you can be "in" on an IPO and still sell on the same day as the IPO - it's just not encouraged.
You can get in on the IPO through WR Hambrect (Score:1)
http://www.wrhambrecht.com/
Re:I still remember (Score:1)
Linux was not a -purpose- for them it was a tool (ie, a means to an end). If there was some other tool out there that was also "free" and Open Sourced, they very well might use it instead.
I know that they are very happy to get the Linux "buzz" in certain circles, but they have also made a point that they are a Server Appliance company, not a Linux company.
Perhaps I'm not understanding this. (Score:3)
Every one in the CNN article showed a loss. 94,000 last year, 2.3 million this year and yet this is worth having an IPO over. Boggles MY mind.
I guess if the US government can run a shop where more money is spent than taken in, then why not every one else?
Re:Perhaps I'm not understanding this. (Score:2)
There are several things to consider when evaluating a company: the value of its trademark(s) and the value of it's intellectual property and physical property. And there is, of course, (cover your ears if you really don't want to hear this) the potential for future profits.
Ummmmmmmm? (Score:1)
Oh well, I guess it got Bugdotted!
Re:I know why they will do extremely well... (Score:1)
Re:Ummmmmmmm? (Score:1)
Re:Analysis (Score:2)
There are some cool technical folks working at Cobalt, and I hope they do well.
Re:Perhaps I'm not understanding this. (Score:4)
Cobalt has physical real-world product. They aren't selling vaporware. They can show consistent growth both in revenue and in product line.
I'm not saying that they have a value of billions of dollars, but comparisons to some other IPOs over the last year or two where those companies with software or information-based (or worse, vapor-based) are really not fair.
/Jahf
Re:There is a problem with IPO's (Score:5)
--Umm yeah, so do you.
If you buy a stock when it balloons to 80 or so, you haven't bought into the IPO; you've bought shares from someone who applied for and got IPO shares for 15 each, and is now selling them to you for 80.
WRONG. I have been in quite a few IPO's and when you are really IN on the IPO, you can't sell until the SEC lockout period ends. That period is usually about 6 months, at which point, if you work for the company you still can't sell all of it.
The way to make money off these things is to watch for the announcements and apply as quickly as possible (you need to fill out a SEC form that says you aren't related to any officers of the company and you know stuff about the market).
--Umm, no. To do that, you need to be on the floor making trades. Since a chair on the exchange (NYSE) goes into the millions these days, I doubt you have one. Maybe you mean your broker does this, but you're still wrong. Your broker usually gets IN on the IPO months before the actual day. (if they can even get in at all)
If you are eligible, you can get shares pretty cheap (usually about 15 dollars) before trading starts.
What are you talking about? The IPO has nothing to do with the low price? It is just where the price starts. The price could start at $400 a share if they wanted. They would just offer a lower float as a result.
Then when it starts trading, if there is significant hype surrounding the company (always the case if it's posted on Slashdot) you'll be able to sell the shares for 5 times what you paid for them very early in the day.
Nope...not for a few months...otherwise everyone would do it.
If you don't get the actual IPO, don't bother trying to buy the stock.
Well, just tell your broker not to pay for than X dollars a share and you _should_ be safe.
If, however, you think the company will be a good long term investment, wait a while to see what happens the the price. It'll probably adjust to a normal price after a few days (a lot of people who get stuck with the stock at the end of the first day don't want to hold onto it).
Yeah...the first true thing you have said.
Just my $.02,
-Davidu
My stock prediction (Score:1)
If I'm right, it would be a no-brainer to short sell it. I'm seriously at least 85% sure on this, but I've gotten burned by short selling before, so I'm a little reluctant to act on my intuition...
More on topic, I think Cobalt should be a good buy, assuming it doesn't open at astronomical prices. I'll be watching it.
(Disclaimer: I'm not a licensed broker. This is not an official recommendation. Just my gut feeling. If you invest solely on this advice, you'll probably get screwed.)
How can i buy IPO stock? (Score:2)
Is there anything special about buying IPO stock, any restrictions?
There is a problem with IPO's (Score:5)
Analysis (Score:5)
Cobalt might be a good long-term. The idea of network appliances like the Cube could very well be the Next Big Thing -- boxes that serve web and don't do anything else are a fairly big step towards simplifying the information environment of a small to medium sized company. The fact that they're using Linux as an underpinning proves only that they know how to be frugal.
That said, we'll have to see how well they're managed before we declare them the next Cisco. What they manage for a line of follow-up products is the Big Question...
----
Wired article (Score:5)
http://www.wired.com/news/b usiness/0,1367,32154,00.html [wired.com]
Read Carefully (Score:1)
----
Re:Analysis (Score:2)
The golden rule with investing is: the higher the return, the higher the risk. IPOs may be a great way to make money in the short term. They may equally be a great way to get burnt. Examine your needs and wants and determine what type of company is best for you.
Re:Ticketmaster (Score:1)
Let's clear this up:
- Cobalt Networks [cobaltnetworks.com] makes "internet appliances"; makers of the all-cool "Qube"
- tickets.com [tickets.com] and it's competitor Ticketmaster [ticketmaster.com] sell tickets to entertainment events.
In closing, If you don't know what you are talking about, don't say anything, you only clutter things up.
Re:My stock prediction (Score:3)
You might want to check out their past annual reports, and take a look at recommendations of Wall Street analysts covering the company.
We may not like some of their crappy software and business practices, but the stock price will continue going up since they are obviously doing very well financially. And this is not likely to change overnight. Things would probably be very different if it was the sentiment of Open Source geek community that was driving the stock market, rather than the logic of Wall Street MBA types looking at nothing other than actual numbers and sales figures.
Re:Analysis (Score:3)
Of course, the way tech stock IPO's have been going recently, it is probably not a bad bet.
Speaking of which, who wants to join in a business venture with me? We will buy a server, set it up, call the company networks.com, IPO, sell to a big company, and make a FORTUNE! Oh wait, I forgot, the company would have to lose money or it wouldn't be worth anything. Oh well.
Re:How can i buy IPO stock? (Score:2)
Re:Perhaps I'm not understanding this. (Score:2)
I know why they will do extremely well... (Score:2)
Execution time (Score:3)
Re:There is a problem with IPO's (Score:5)
If you buy a stock when it balloons to 80 or so, you haven't bought into the IPO; you've bought shares from someone who applied for and got IPO shares for 15 each, and is now selling them to you for 80. The way to make money off these things is to watch for the announcements and apply as quickly as possible (you need to fill out a SEC form that says you aren't related to any officers of the company and you know stuff about the market). If you are eligible, you can get shares pretty cheap (usually about 15 dollars) before trading starts. Then when it starts trading, if there is significant hype surrounding the company (always the case if it's posted on Slashdot) you'll be able to sell the shares for 5 times what you paid for them very early in the day.
If you don't get the actual IPO, don't bother trying to buy the stock. If, however, you think the company will be a good long term investment, wait a while to see what happens the the price. It'll probably adjust to a normal price after a few days (a lot of people who get stuck with the stock at the end of the first day don't want to hold onto it).
Re:A theory on IPOs... (Score:1)
So, since it's now believed that computers magically generate money without customers needing to pay anything, perhaps Transmeta could be the firm semiconductor company to follow the trend by giving away their products?
A theory on IPOs... (Score:4)
Transmeta I P O
Yes, that's right. Transmeta's only real product will earn them millions of dollars in a matter of seconds, and it's only three little letters: IPO. No programmable chips, no anti-microsoft ultimate anything, just an IPO. We now know the truth.
Re:A theory on IPOs... (Score:1)
(Nor is there a link to a Virgin Mobile site from virgin.com... Oh well)
Granted, it's a slightly different scenario, where Virgin does have a pretty good past record in pulling things off (alright, ignore the trains and ignore their Body Shop rip-off), but still...
It's all a bit silly, innit?
Wish 'em well (Score:1)
BTW, does anyone else think this "i" and "e" thing is getting waaaay out-of-hand? I mean, "e-tailers"! God, makes me want to hurl.