How to Buy IPO Stock

Author: James Clark

The best way to invest in IPO Stock

Initial public offerings or IPOs happen when a company places its stock for sale on the public markets. All major U.S. IPOs take place on the New York Stock Exchange or the NASDAQ and are highly anticipated. Once the underwriting bank sets a price for the stock, it will start trading on the market, and the price will be governed by the supply and demand laws. Investors and individuals are free to purchase their stock and diversify their investment portfolio.

If you’re looking to buy IPO stock, you will need to work with a registered stock broker. You can also try and purchase private offerings, but you will need to contact the representatives of the company directly. In this article, we will share how to buy IPO stock in detail.

Buying IPO Stock

When you want to buy IPO stock, a lot will depend on the process you initiate to buy the stock. You will need to work with a registered stock broker, and if the company hasn’t gone public, you must visit its website and contact the firm through their contact number. You will need to find out if the sales are available at a private offering and what price are they being offered at. The representative will then put you in touch with the broker dealer of the firm to complete the sale.

At this point, you will wire the funds to the company and will then be issued a stock certificate. If you want to buy the stock at the IPO or later, you need to register with a stock broker and wire the funds to your brokerage account. After the IPO takes place, you place a call to your broker to make the sale. You can also go online and buy the shares of the company yourself. The company will issue you virtual certificates once you have purchased the shares.

Purchases in the Pre-Market

You can buy IPO stock before or after the broker has set the opening price for the stock. To purchase the stock before there is a fixed price, you need to have a special arrangement with the management, or you should be a professional investor. These investments require a significant amount of funds that could easily cost you millions of dollars. The risk of purchasing pre-market IPO stock is also greater since the shares will be harder to sell before the IPO has been made public.

Understanding IPO Price

The IPO price will be the official price that the bank underwriting the deal has set and will use it to sell stock to investors. However, investors have the chance to purchase IPO stock at a special price in certain circumstances. That will be if you have a stock trading account at the bank that is underwriting the IPO. Once the price is set, it can’t be changed, and you must buy IPO stock at that price.

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