Tuesday, 9 December 2014

IPO Game

Initial Public Offering,the first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded. source (Investopedia)

PSPC and X are the recent IPO's in the Philippine Stock Exchange, both of them showed oversubscribed status before the listing. 

PSPC or Phoenix Semiconductor Philippines Corporation was established by STS Semiconductor, Korea's leading provider of semiconductor packaging.

X or Xurpass Inc. is a technology company specializing in the creation and development of digital products and services for mobile end users.

Those given X shares are very happy from IPO price of 3.97 to 9.05 equivalent to 125 % gains and those with PSPC shares are very lonely from IPO price of 3.76 to 2.60 equivalent to 31.60% loss as of today's closing.

Many are looking for answers why there are stocks that gave 100% gains during IPO?
Many are questioning, Is it good to subscribe during the IPO period?

The risks associated with IPO stocks are very high because of little historical data to analyze the company. For traders they don't have much to look at their technical charting. These companies are under uncertainty and undergoing a transitory growth period. No one knows what will be the future values of the company.

Sometimes the risks associated is worth, sometimes is not.
As a newbie mentor, I recommend to check if the company has a good expansion plan and where the proceeds of IPO will be spend. 

As a developer of PAM PSE Tracker and mobile apps enthusiast, I chose X. The result is impressive.



Sincerely yours,

Newbie Mentor
P.S. Newbie book will be available soon, looking forward for your support..

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