Buy Ipo [UPD]
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How do you buy IPO stock? First, understand the process: When a company goes public and issues stock, it wants to raise capital and make shares available to the public to purchase. The IPO is underwritten by an investment bank, broker-dealer or a group of investment banks and broker-dealers. They purchase the shares from the company and then sell and distribute the shares at the IPO to investors. Until the IPO happens, the company remains private.
The goal of an IPO in the first place is to raise a certain amount of capital for the company to run its business, so selling a million shares to an institutional investor is much more efficient than finding 1,000 individuals to purchase the same amount.
Institutions that get to participate in the initial public offering often do a lot of business with the brokers underwriting the deal. That relationship puts them in prime position to access some shares in the IPO.
The reality is your broker perceives individual investors as unattractive targets for IPOs. Instead, management, employees, friends and families of the company going public may be offered the chance to buy shares at the IPO price in addition to investment banks, hedge funds and institutions. High-net-worth clients may be rewarded with IPO shares from time to time as well.
To get some insight into how the company works and how the stock is valued, investors can look at the massive registration document required by the Securities and Exchange Commission for all new securities.
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There are certain regulatory restrictions as to which customers may participate in an IPO. For example, FINRA rules prohibit "restricted persons" (certain persons associated with the financial services industry) from participating in the purchase of new issue offerings. However, any eligible customer who completes and passes an investor profile may submit a conditional offer to buy for an IPO.
The first step in the IPO process is the Investor Profile Questionnaire. Customers will need to complete an Investor Profile for the account through which they would like to participate in an offering. The Investor Profile will determine whether or not an account is eligible for participation in a particular offering based on a number of factors including investment experience, objectives, residency, financial background, and affiliations with the issuing company or other financial institutions. Due to regulatory requirements, all accounts deemed eligible to participate are required to access and acknowledge the prospectus prior to submitting a conditional offer to buy for an offering. The prospectus contains important information about the issuing company and the offering.
E*TRADE will make an exception for a client with visual impairment to complete and submit "offline" (e.g. with the help of the Customer Service team) any and all required materials, documents, etc. related to the new issues process. Eligibility to participate will still be governed by the steps listed above. Further, eligibility does not guarantee that a customer will receive an allocation of shares.
E*TRADE sometimes provides its customers with cash credits or special offers related to the opening or funding of accounts or other activities. E*TRADE credits and offers may be subject to U.S. withholding taxes and reporting at retail value. Taxes related to these offers are the customer's responsibility. E*TRADE reserves the right to change the offer terms or terminate the offer at any time without notice.
E*TRADE charges $0 commission for online US-listed stock, ETF, mutual fund, and options trades. Exclusions may apply and E*TRADE reserves the right to charge variable commission rates. The standard options contract fee is $0.65 per contract (or $0.50 per contract for customers who execute at least 30 stock, ETF, and options trades per quarter). The retail online $0 commission does not apply to Over-the-Counter (OTC) securities transactions, foreign stock transactions, large block transactions requiring special handling, futues, or fixed income investments. Service charges apply for trades placed through a broker ($25). Stock plan account transactions are subject to a separate commission schedule. All fees and expenses as described in a fund's prospectus still apply. Additional regulatory and exchange fees may apply. For more information about pricing, visit etrade.com/pricing.
If you are attempting to enroll in this offer with a Joint Account, the primary account holder may have to fulfill at the tiers noted before the secondary account holder can enroll in this offer. If you experience any issues when attempting to enroll with a Joint Account, please contact us at 800-387-2331 and we will be able to assist you with your enrollment.
Offer limitations: Offer valid for E*TRADE Securities brokerage, Coverdell, and the following types of E*TRADE retirement accounts: Traditional IRA, Individual 401(k), Roth Individual 401(k), Roth IRA, Rollover IRA, Beneficiary Roth IRA, and Beneficiary Traditional IRA
This offer is not valid for any business (incorporated or unincorporated) accounts, other E*TRADE Securities retirement account types (SEP IRA, SIMPLE IRA, retirement accounts for minors, money purchase pension plans and investment only noncustodial retirement plans, Beneficiary IRA Estate, Beneficiary IRA Trust, Beneficiary Roth IRA Estate, Beneficiary Roth IRA Trust), E*TRADE Capital Management, E*TRADE Futures, and Morgan Stanley Private Bank, National Association accounts. Excludes non-U.S. residents, and residents of any jurisdiction where this offer is not valid. You must be the original recipient of this offer to enroll. Customers may only be enrolled in one offer at a time. Cannot be combined with any other offers. Each customer limited to a maximum of two new account offers.
Consolidation is not right for everyone, so you should carefully consider your options. Before deciding whether to retain assets in a retirement plan account through a former employer, roll them over to a qualified retirement plan account through a new employer (if one is available and rollovers are permitted), or roll them over to an IRA, an investor should consider all his or her options and the various factors including, but not limited to, the differences in investment options, fees and expenses, services, the exceptions to the early withdrawal penalties, protection from creditors and legal judgments, required minimum distributions, the tax treatment of employer stock (if held in the qualified retirement plan account), and the availability of plan loans (i.e., loans are not permitted from IRAs, and the availability of loans from a qualified retirement plan will depend on the terms of the plan). For additional information, view the FINRA Website.
If you have multiple IRAs at E*TRADE or at other financial institutions, the annual contribution limit applies to contributions made to all of your IRAs (traditional and Roth IRAs) combined which can impact your ability to make a contribution to an IRA for the current tax year. Before making a contribution, check your other IRAs and refer to the Contribution Limits Table for more details.
E*TRADE Securities LLC and its affiliates do not provide tax advice, and you should always consult your own tax advisor regarding your personal circumstances before taking any action that may have tax consequences.
This offer neither is, nor should be construed as a recommendation or solicitation to buy, sell, or hold any security, financial product or instrument or to open a particular account or engage in any specific investment strategy.
The material provided by E*TRADE Securities LLC, E*TRADE Capital Management, LLC, Morgan Stanley or any of their direct or indirect subsidiaries, or by a third party not affiliated with E*TRADE is for educational purposes only and is not an individualized recommendation. This information neither is, nor should be construed as, an offer or a solicitation of an offer, or a recommendation, to buy, sell, or hold any security, financial product, or instrument discussed herein, or to open a particular account or to engage in any specific investment strategy. 041b061a72