I wrote about Loyal3 a few months ago and how using Loyal3.com can be an awesome way to get your hands on IPO allocations. Last year Loyal3 offered about 6 IPO allocations for it's customers in 2014.
So far this year, only one has become available. So they don't happen that often.
Recently, Loyal3 made GoDaddy IPO allocations available to it's customers. Here's my experience:
- March 19th - Recieved email that GoDaddy IPO reservation sign-up was available. Max reservation was $5,000. Immediately I reserved the Max 5k for both my account and my wife's account. Making this reservation does not mean you can't cancel later. I always make the max reservation because I can always cancel or only put the amount of funds I am wanting, in my Loyal3 account (you will not be allocated more than what is available in your account). It's also very important to make your reservation immediately because the number of shares are limited and will no longer be available after a few hours most likely. I did my reservation on my smart phone.
- When you make the reservation, you will be asked some simple questions about your finances (how much savings, estimated net worth, etc)...error on the higher end to ensure you will be given the max reservation. Go back and input larger values if it says you are not eligible for the reservation.
- March 28th - I deposited 5k into my account and 5k into my wife's account
- March 31st - IPO price set at $20/share. I am allotted $3,880 (instead of the full 5k) for each account. I would have like to be allotted the full 5k, but it's not too bad.
- April 1st - GoDaddy (GDDY) goes public on the stock exchange. I know that no matter how high or low the stock goes, my plan is to sell that same day. The stock starts up 30%! I put in my sell order on Loyal3. Loyal3 only has 1 sell time during the day at 2 pm eastern time (this is one negative thing about Loyal3). At 2 pm eastern time zone, my sell order goes through at $26.16/share. Total increase: 30.8%.
- Total profit: $1,195 (my account) + $1,195 (my wife's account) = $2,390.
Of course I'm pretty happy about the results. I will have to pay short term capital gains tax (which will probably be 15% for me), so the net profit will be about $2,000. Even though GoDaddy has been viewed as a questionable investment due to poor financials and a number of other factors, I still wasn't afraid to go in on the IPO and sell the same day.
Of course there is risk. If you don't want to miss out next time an IPO is offered, you should read my previous article before jumping into buying IPO shares from Loyal3.
I plan on doing this same strategy whenever Loyal3 offers me IPO allocations.
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Disclaimer: I'm not a financial planner/advisor. I'm just sharing my experience!
What do you think? Any of you ever get an IPO allocation? How was your experience?