Tuesday, October 27, 2015

Loyal3 First Data (FDC) IPO BUST

Loyal3 First Data (FDC) IP Bust

This past week I invested $20,000 in getting IPO share allocations of First Data (FDC) via Loyal3 trading platform. Up until this point, EVERY IPO that has been made available via Loyal3 has had a positive return on DAY 1....Until now.
It wasn't a huge loss, but it was a loss. It started up over 1%, but then quickly sank below the $16 IPO price. My strategy when purchasing IPO's is to sell the same day it goes, public unless I really, really like the stock. Whether it goes up or down, I am committed to sell on day one.
By the time the Loyal3 sell order went through the price was $15.92, so I lost just under $100 on this deal. It could have been worse, so I'm okay with the $100 loss. The risk/reward is usually worth it when purchasing IPO's.

Lesson's Learned when buying IPO's via Loyal3:

  • If the IPO is available on Loyal3 for a long time (a day or longer) then, that may mean there might NOT be strong interest in the stock. First Data (FDC) was available for a full day and the hotter IPO's usually will be unavailable within a couple hours.
  • If the price for the IPO is set lower then the price range initially given, this might also be another warning sign. You would think that it's a good thing if the price is set lower, but I think this is actually signaling lower interest in the stock, which will then NOT have as much hype and "pop" when it goes public. The price is set the day before the stock goes public. For First Data, the price range was listed on the prospectus as $18-$20. The final price set the day before going public was $16.
*These are just my personal observation

First Data (FDC), has been up and down $16 since it's IPO, but I'm still glad I sold on day one. I feel the risk of staying in with a company I don't have interest in is not worth the risk. This is just my strategy. Although, there is the school of thought that you should never invest in a stock, even for a minute, that you are not willing to keep for the long term (3+ years).

Even though First Data was a failure for me, I still think there is tremendous opportunity in acquiring IPO's.

What has been your IPO experience?


No comments:

Post a Comment

Cheapest Place to get Contact Lenses?

Where to get the cheapest contacts? About 15% of American's wear contact lenses. That's a fair amount of people and I'm one...