Start the conversation
That's because IPOs can be a great source of wealth. Since Spark, a gene therapy biotech firm, began trading Jan. 30, the stock is up roughly 100% from its offering price of $23.
But here's a little secret that Wall Street doesn't like to talk about – most retail investors can't get anywhere near hot IPOs like Spark's.
The vast majority of these initial shares are allocated to mutual funds, hedge funds, pension funds, insurance companies, and high-net-worth individuals. That means retail investors like you have to pay a premium for the stock after it's already begun trading, seriously cutting into your profits.
So today, I'm going to show you a way to side step Wall Street and play the IPO boom…
IPOs: I'm a Believer
Don't get me wrong. I'm a big believer in IPOs.
IPOs are one of the main reasons why Silicon Valley can bring us a steady stream of innovations. Initial offerings give entrepreneurs the opportunity to go from early-stage startups to publicly traded firms in just a few years.
And you'd be hard pressed to find a better IPO environment than we have right now.
Some 275 companies went public in the United States in 2014, the highest number in 14 years, according to market trackers Renaissance Capital. The total value of 2014 U.S. IPOs was $85 billion, a 55% increase from 2013.
High-tech and life-sciences firms played a big role there. Together, they accounted for 57% of new issues.
While it may not eclipse 2014′s boom, this year is already shaping up to be another big one. Roughly 200 firms are on track to issue stock this year.
And that will create a lot of wealth.
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.