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E-Trade backs down, lets Red Hat IPO folks in
Bowie J. Poag writes "First it was "The eligibility profile will have no bearing on your ability to participate." Then, it was "Sorry! you failed the eligibility profile since you dont have half a million in the bank and 20 years trading experience. Bye." Now we've come full circle, thanks to a great deal of flames from the community.. E-Trade is backing down and letting us in. "
"In no uncertain terms, he proceeded to tell me that ETrade did not do background checks, would not attempt to discover if I lied, and implied that if I thought about it, and was willing to lie, I could fill out the form in such a way that it would accept me," Sparger said.
:)
Wink, wink. Nudge, nudge. This is the way it works, apparently. *Everyone* lies.
Nor are these the only tech stocks plunging. According to several articles I've read, tech stocks are collapsing in value, especially Internet stuff.
In an environment of doom, gloom, and rush selling, I don't know whether buying into Red Hat right now would be a wise move. Sure, if things pick up, just before the IPO, those putting their money in will earn a small fortune. Red Hat is one of the few companies making money, and has a good public image.
On the other hand, I can't help but suspect that bargain-hunters will be able to pick the shares up for less, the following week or so. When the shareholders panic, they've all the wits and wisdom of lemmings. Only without the cuteness quotient.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
Now - if you were screened out the first time due to financial background or trading experience, I don't want to hear a single complaint about how you lost your money on this investment. Kapisch?! :) (Of course, I hope no one loses... but I really don't know how this thing will go!)
1) Call them and ask them these questions. If you got the Red Hat letter, call the number listed there. They were very helpful to me.
:-) I wouldn't be surprised if this prices at $14-$15 per share, sold in 100 share lots. And I assume that there's a fee for the transaction, as well.
2) You should have had more than a week... the Red Hat letter was dated 7/20, and you have until August 4 to have a funded account and make your indication of interest. Do this from the URL that was mentioned in the letter. If you didn't get the letter, don't cheat, because E*Trade will block you from ever participating in any IPO with them again.
3) You can probably fax in your application and wire the necessary funds to speed things up and avoid the USPS.
4) $1000 isn't gonna get you jack.
I've seen a lot of people complaining that they couldn't get things done in time, couldn't find the link, etc. If you're serious about this, and you're having problems, then CALL E*Trade! There were some problems with their web site, etc. The phone support was helpful, and they were able to take care of all the problems I encountered. I ended up talking to a broker rather than using the web site. What a concept. :-)
Damn, I can't stop replying to this thread...
Well, anyway. Let's try to clear up some more misunderstanding.
Red Hat is having an IPO. They are issuing public shares for the first time. Some people will be able to get in at the initial price (currently estimated at $10-$12 per share) which is set before the stock trades publicly. Often, this price is significantly below the price that the stock will see on the first day of trading. On the first day of trading, anyone and their dog can buy shares by calling their broker or clicking their browser.
You did not need to get "the letter" in order to get in on the initial price. E*Trade customers and customers of other brokerages also have this opportunity. However, Joe Blow E*Trade customer will be competing with thousands of people for an allotment of shares. On E*Trade, it used to be first-come first-served, but now it's a lottery system, with shares allocated in 100-share chunks.
However, Red Hat has set aside 800,000 shares to be "directed" to the open source community. That's what the letter did - it gives you a (possibly) better chance to actually have shares allocated to you out of this pool, rather than the general public pool. It guarantees that up to 8,000 people will be able to purchase at leat 100 shares each. Of course, you must be eligible to participate in the IPO in the first place.
Getting the URL, the phone number, or the password from the letter will not help you out if you didn't actually receive the letter. E*Trade is screening for this - they know who Red Hat sent the letter to originally. If you try, you will most likely be barred from ever participating in any IPO through E*Trade in the future. Them's the breaks.