GoPro IPO on LOYAL3 | Hacker News Reader

GoPro IPO on LOYAL3

ipo.loyal3.com

38 pointsvmialik11 comments

It's always seemed strange to me that IPOs are not open to the public in the US. Is it some kind of Great Depression legacy?

Here in Finland IPOs have been open since at least the '80s, or maybe always... In the original dot-com hype days of 1999, there would be long queues in front of banks as the "Joe Publics" wanted to put their money into IT stocks that were mostly crap ISPs or web design consultancies. All those stocks crashed hard a year later, of course. (But then again, you wouldn't have been much better off investing in the "big and established winners" like Nokia, which peaked at around 90€ and later traded at below 2€ in the darkest post-Symbian days.)

There was actually a really interesting experiment at the tail end of the dotcom boom -- the WR+Hambrecht (San Francisco) "OpenIPO". Essentially it was a dutch auction (I think) for IPO shares, and open to the public. Google was the big success.

https://en.wikipedia.org/wiki/OpenIPO

VA Linux did some interesting stuff with their IPO (so did RedHat, I think), where community members got access above what the public received, too.

They want to protect casual investors from con men. Finland is likely small enough that you can easily verify people through social and family connections. In the US it's quite common to go into business deals where you know almost nothing about the individual.

You are describing a Direct Public Offering [0], which was widely used in the US in the 19th century but waned in the 20th.

Loyal3 does not appear to be underwriting GoPro's IPO. If they are being traditionally underwritten, some other syndicate is doing that and a select fraction of their clients are getting the IPO price. Loyal3 is apparently merely including it -- immediately, on the IPO day -- in the list of securities it permits its clients to transact in. Many brokers, including discount brokers, will do this. Also, it looks like Loyal3 does dollar-based investing. That is, you specify how many USDs you want to spend and Loyal3 eventually delivers some quantity of the security in exchange for those dollars. If you expect a stock's price and availability to fluctuate significantly on its IPO day, you may find that you get a lot less for your dollar that you thought you would.

[0] http://en.wikipedia.org/wiki/Direct_public_offering

Interesting. From the Loyal3 landing page: https://www.loyal3.com/

"I love the Amazon brand and service, and now I can invest in this brand whenever I have a spare $20 or $50." -Jacob Ortiz

And then on their "About us"

We offer a technology platform where people can buy stock in their favorite brands in 3 easy steps, invest as little as $10 and pay no fees, really.

By using ownership to bring brands together with the people who love them, the LOYAL3 platform deepens brand engagement and creates more valuable and loyal stakeholders.

Then the letter from the CEO: https://www.loyal3.com/about-loyal3.html#contact

Basically what I read from this is that people can, for as little as $10, own a piece of any company, especially ones that "they love", and not-legally-speaking have to do zero financial diligence. I'm all for innovation, but that's scary.

> Basically what I read from this is that people can, for as little as $10, own a piece of any company, especially ones that "they love", and not-legally-speaking have to do zero financial diligence. I'm all for innovation, but that's scary.

How is that any different than the other trading platforms?

This Loyal3 looks interesting because of the IPOs, credit card purchasing, and the no fees option.

However I am wondering what happens if the company (LOYAL3) folds since it allows fractional shares? Closest reference I found was this,

"LOYAL3 Securities, Inc., as a broker-dealer, has to comply with certain regulations regarding the requirement to have adequate net capital and asset protection. LOYAL3 segregates your securities holdings and cash in your account, meaning it keeps your assets separate from the firm’s own assets. In addition, LOYAL3 Securities, Inc., is a member of SIPC, which protects securities of the customers of its members up to $500,000 (including $250,000 for claims for cash). An explanatory brochure is available at www.sipc.org."

In the case if a full service firm, you can move those shares to another account at a different institution once the year settles. Should be the car at this company too, but I suspect that the process would be much more annoying since you can't just pester a person on the phone for info.

Knowing nothing at all about investing, this looks pretty awesome. I wish they could provide a global service, being outside of the US.

What are the limitations of using a platform like this to buy shares and what would the limitations be on their side to be US only?

This concept and platform seem like a great thing, but GoPro's $3B valuation may be aggressive.

> We offer access to all U.S. residents only

Ugh.

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