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Almost nothing generates a bigger financial media splash than a red-hot initial public offering (IPO). It's like the Oscars, Christmas, and the Fourth of July rolled into one.
And (with the exception of a few cannabis IPOs) that can be a bit of a problem for regular investors, who might naturally get excited by the hype.
An IPO like Lyft Inc. (NASDAQ: LYFT) is like a big, fancy dinner, where huge players – like Carl Icahn, say, or Ray Dalio – and the underwriters are all sitting at the table chowing down on gourmet food. They get first dibs, and the best prices.
In fact, just yesterday, The Wall Street Journal reported Carl Icahn sold his 2.7% Lyft stake to George Soros ahead of the public offering.
Under that table, scrounging for scraps that might fall, are… regular investors like you and me. It's often nearly impossible to buy shares, and if you do manage to get an order filled, you'll almost certainly have paid way too much.
Yep – our "competition" in the IPO game is folks trading $550 million positions like they're trading baseball cards.
About the Author
Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.
With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.