I get the sentiment that this is unscrupulous, however, isn't 15 days enough time to find the right price? Or will that not really happen until first quarterly earnings report, which will not occur within that 15 day window?
And there are plenty of ways to manipulate the price, such as issuing a low float to a hyper hyped stock..
And yes often a falling knife
This is pretty predictably wall street & federal regulators scamming normal people, retirement funds, etc, taking their fees and exit window at everyone else's expense
Where are you getting this timeline from?
- The initial pop is known to be manufactured by banks, so mostly benefits insiders, so good time to diversify. I'm conservative so sold to cover effective basis or whatever risk strategy :)
- The lockup period (6mo) is a similarly known artificial event, and studies show that
- Tech companies take ~8 quarters of prep for the IPO as they do financial engineering to transition from VC growth-at-all-costs to public $, and I'd expect the same for whatever nonsense they pulled to juice numbers to shake out. And that's not including oddballs like the Musk alternate universe, just normal tech companies covering up EBITDA and low interest rate madness.
- Tech is especially volatile as an industry, so even more skepticism here. Eg, the latest IPO I was involved in was a successful professional social network play, and chatgpt killed it.
Most/all of these are googleable things
Lock-up expiry is a real effect. Everything else you mention is Reddit stuff—trading the pop is practically a gamble.
Maybe the confusing point was my involvement is (discounted) pre-IPO shares, which almost by definition, is not an activity accessible to retail investors.
Meanwhile some of these companies are also lobbying to be able to only have to submit annual or biannual earnings reports, too.
Everyone is looking for multiple ways to leave the dumb money holding the bag.