If you couldn't get a piece of the largest IPO in history a couple of weeks ago, you were far from alone.
I think the Alibaba Group Holding Ltd. (NYSE: BABA) initial public offering will go down as the greatest wealth opportunity of a generation – but only about 4% of the $25 billion worth of stock went to individual investors like you.
As alluring as Alibaba and the white-hot IPO market can be, it's not a place to play unless you have the "connections" needed to access the best deals – or have a special "angle" to play.
I can't help you with the connections. But I can give you that special angle.
And that angle will give you access to the profits rolling out of Alibaba and the IPO market – but at a much lower level of risk.
So today I'm going to show you a far better way to gain access to Alibaba's huge profit stream at a nearly 50% discount from the stock's current price – and at a much lower level of risk.
And I think you'll beat the overall market by some 80% over the next two years…
The Lifeblood of Silicon Valley
As a tech insider and someone who's watched and profited from IPOs for years, I know that Silicon Valley runs on IPOs. The promise of buckets of IPO cash is why venture capitalists back promising tech companies in the first place.
Not only that, but a healthy IPO market is good for stocks in general.
Bull markets like the one we're in run on fresh cash flowing in. And there's nothing quite like an IPO to keep investors buying stocks.
The good news here is the IPO market right now is the healthiest it's been in years.
According to Dealogic, the Alibaba IPO brought the value of deals so far this year to $69 billion. That's up 11.2% from the same period last year and puts it on pace to be the best year for IPOs in a decade.
In other words, Alibaba had a successful IPO in a great climate for new issues – and all that bodes well for the market as a whole.
But for retail investors, Alibaba represented three negatives.
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About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.
Michael, one of MoneyMap advisories sent out just before the Alibaba IPO indicated a way to play the IPO was to invest in Softbank, which owned a portion of Alibaba (17% as I recall) and should jump about 149% after the IPO. I picked up some of Softbank, but it hasn’t moved since the IPO. Would you have any idea what has happened?
James Clark