May 11, 2007
Interactive Brokers Group IPO and Winner’s Curse
I didn’t participate in the IBKR auction (fortunately), but I will buy some shares at some point. Here are some interesting stats from a press release:
— The auction clearing price was $33.00.
— The offering price was $30.01.
— A total of 13,504 bids were received in the auction.
— A total of 8,282 bids were successful.
— A total of 145,514,807 shares, in total, were bid for at prices equal
to or in excess of the offering price.
— The pro rata fill rate for bids was 27.5%.
Cat: | Time: 8:20 am (utc+8)
May 12th, 2007 at 1:06 am
Saw you wear some CROX shoes on your trip to china,
did you get in on any of the CROX action lately?
May 12th, 2007 at 8:27 am
william: Good eye. I got some Crocs for Christmas last year and love them (being an old Birkenstock guy), but I don’t own a single share of the company.
May 12th, 2007 at 9:23 am
CM,
Curious, but what’s your reason for wanting to get into IBKR at some point?
May 12th, 2007 at 9:28 am
Amir: The old Peter Lynch principle: love the service, buy the stock. You’d be hard pressed to find a day trader who doesn’t keep money at IB.
May 12th, 2007 at 11:23 am
i love the Vonage service. I tried to get in on their IPO… the Broker refused claiming i am not whom i claim to be. Good thing.
i do not plan on buying VG regardless of what Mr. Lynch said :)
May 12th, 2007 at 11:25 am
I participated in the IB auction. I bid $31.03 for 1,000 shares, but was only allotted 300. That was because the provisions were that the sellers were allowed to increase the amount of shares and sell them to those who didn’t make the $33 clearing price cutoff. That’s how I got a piece even though my bid was below the cutoff. I read that this also meant that those that did make the cutoff would have their allocation reduced in the process.
I flipped the shares intraday the first day, as the volatility was truly frightening, and I got out with— I forget exactly what— something like a 7% profit.
I should also point out that the start was delayed, so that getting out higher was made impossible because I didn’t put the chart on top on my monitor, and by the time I made my way back to it the stock had opened and had moved all over the place.
Notwithstanding my success, it wasn’t a good experience. I had gone to Yahoo’s IPO center the night before and had looked at the charts of the ten best and ten worst IPO’s of the last three months. The opening day range is generally of the order of magnitude of 10%, and there appeared to be no simple pattern regarding how the stock closes on the first day versus what happens the next day. So, in all, you’re flying without a parachute.
May 12th, 2007 at 2:46 pm
Born2: Well, yes, the Peter Lynch thing is often a terrible idea. ;-)
Mike: Thanks for sharing your experience… did you buy it planning to flip it on the first day?
May 13th, 2007 at 12:56 pm
Mr. Chairman,
No, I had hopes of riding it to a two-fer or three-for, with loose stops— followed by a victory year of salmon fishing. Looking at the other IPO daily histories sobered me up and when I saw the volatility first hand I really knew that I wanted out. (There’s no way that I would have held on while it tanked anyway.)
I’m talking about the first hour or so of trading. The jitter in the price was fantastic. My chart reading skills— it’s debatable as to whether or not I actually have any— were useless.