You guys should have invested in blue chips instead of these ultra new, vapor, non-profit, pie-in-the-sky, tech companies. I have some money in tech, but all of my retirement money is good 'ol blue chips and index funds.

-boka

 

Even the bluechips are getting beat up. Not as bad as the techs but still not doing good.

 

I got a question about high-tech startups. Who is it that gets in on those IPOs for a staggering return? Hmmm, blue chips you say? So what happens to the blue chip bellweathers when all their investments stop paying out?

Ever wonder why Intel, Cisco, etc. were always announcing how they made some investment in some startup that goes public not long after? They do it for the priviledge of a front row seat at the trough come IPO time, or at least they did.

So once you take away all that glorious cash from VC operations you get to see exactly what the company's core products are like, ala Intel & Cisco going into the shitter.

 

Don't even get me started? Very !!!Good thing I already bought the S2000 otherwise I will be driving the ghetto scooter to work...

 

Participation in an IPO generally goes to heavy hitters who are frequent and large investors. IPO shares are usually allocated to large investment houses who in turn pass on the favor to their large clients who are interested.

I did get in on one IPO in 1999. E*Trade was able to use their leverage to get shares allocated in various IPOs. They in turn offered the shares, in 100 share lots, to their regular customers. But it was strictly a first-come, first-serve basis. Kind of an "IPO for the masses" thing. They had a web page that they would update when they would offer shares. It generally happened on a Tuesday or Thursday afternoon, after the market was closed. If you got in while the window of opportunity was open, you might get allocated a 100 share block.

I actually used a website monitoring tool that I would turn on on those afternoons and monitor changes to their web page every 30 seconds. It would then page me. I always made sure that I was at my computer during that time. If you could get through their qualifying questions, which you had to do every time, suffer through extremely poor response times, you might make it to the end.

Out of a couple of several dozen opportunities, I actually was allowed to purchase 100 shares of Value America (VUSA). E*Trade had a rule that suggested that you hold your shares for at least 30 days "until the stock stabilized", otherwise you "may not be allowed to participate in future IPOs".

When it went public, the prices skyrocketed, as they almost all did at that time, from $23 to 3-5 times that amount. I obediently waited the 30 days while the stock continued to drop and then immediately sold. I was able to make only a 50% profit ($1150!). Still, 50% profit in 30 days ain't bad. To bad I wasn't allowed to purchase 1000 or 5000 shares! Of course, Value America went belly up within 12-18 months if I remember correctly.