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E*Trade Opening Red Hat IPO to Members
TBC writes "Etrade's IPO center is now accepting indications of interest for anyone with an E-Trade account. They will probably continue accepting indications of interest until 5:00pm CDT. Get it while you can... " Today is
apparently the deadline for the last round of folks trying to get
in before the public. A lot of people got theirs. A lot more didn't.
If nothing else, this has been a learning experience for a lot
of people. And a pretty profitable one for E*Trade too I bet.
Update: 08/04 10:20 by CT : A few people noted that the times up.
Thanks to Dylan's advanced object model and built-in garbage collection as well as its type optimizing compiler, I got in! Woohoo! Go Dylan!
One right way to do it is to allocate 100 shares to everybody in the class who asked for 100 shares. Then allocate another 100 shares to everyone who asked for at least 200 shares. Then allocate another 100 to everyone who asked for at least 300 shares. And so on.
Politically that would be the best for Red Hat, spread it around and get popular.
I indicated 1000 shares at $13.75 per share. I'll let you know how it goes.
BTW e*trade doesn't make their money on the commission (there may not even be a commission on an IPO). They get about 7% of the price. E.g. if it prices at $12, you pay $12 per share, e*trade keeps $0.84 cents, and Red Hat receives $11.16. That's where the real e*trade profit is.
I talked to the redhat ipo hotline and was told they would accept indications of interest until the 7th. I just sent in a check monday(yea late i know). i show money in the accout but could not fill out the interest form, i just got the "account not available". the rep said try tommorrow.
So anyway is that it? NO chance anymore? I thought the 2hr timeframe limit was for regular etrade people, not people redhat invited. Well what's the deal?
I got in, thanks to Standard ML's polymorphic type system, its versatile modules and functors, and the elegant functional style it encourages!
:)
Okay, so maybe not ("Offering Not Suitable"), but Standard ML is still a really cool language
If I don't get any RHAT, I'll keep $1000 in the account so that if VA Linux, Caldera, or some other Linux company does an encore, I'll have the first couple of steps already done.
If you don't have $1000 in savings then you need to be really damn careful about IPO's in the first place!
Meanwhile I'm going to educate myself, this is the first IPO I ever tried to get into, I want to be more ready for the next one. I would be literally be losing my mind right now if it weren't for the people on Slashdot sharing their experiences. I'd like to be more informed and more calm the next time.
Maybe Slashdot needs a "capitalism" or "markets" section? Does NYSE qualify as "news for nerds"? It sure is "stuff that matters."
I'm done with Etrade. I'm moving the rest of my funds over to Schwab to get better customer service and a web site that actually works.
Funny. The way it looks now is that they are getting bad mouthed by those people that they excluded. Should serve them as a lesson.
> Getting sued isn't profitable.
If Red Hat will indeed rise to $60 or more, as some analysts claimed, it could get interesing. Hopefully, one lawyer will smell the opportunity, and set up a class action suit for the lost profit on behalf of all those that were deemed not eligible
Probably not, Mister Gates. Out of the 6M, 800000 have been set aside for us open source community members
That's the day of the total solar eclipse in Europe. How come RHAT chose that date? Did they ask their astrologuer for advice, or what? Does it mean that we should short SUNW and buy LYTE? :-)
Perhaps so, perhaps not. There's a lot more buzz out there about Redhat right now. In any event, it's as though VA were opening up their IPO entry to "us".
Or do you know something you're not telling?
Ditto.
I sent them a nastygram asking them what they are going to do about it, and why I shouldn't move my $11000 in securities and cash to Fidelity because they pissed me off.
We'll see just how much clout $11K can buy a guy, eh?
I am looking at a list of IPO's that are coming out in the next month.
.com at the end
There are over 60 of them.
Half of them have a
The rest of them are obviously intenet or tech companies (with the exception of Blockbuster and UPS).
60 IPO's in one month is almost unheard of by the way.
With the most recent IPO's, you did not have to wait a month for a lower price.... you only had to wait a day!
This does not bode well for Red Hat. Hopefully. because they are not an internet company, they will not fare the same... but unfortunately, i think it is going to be lumped together with them anyways.
If you get the shares at the initial price, sell quickly. Then buy them back later if you want to own the company. that's my advice.
I called E*Trade a couple of days ago to ask when the Red Hat IPO would open, and I was told to check back every day to see when it does. Well, I check in this morning, and it's already closed, so I'm screwed through no fault of my own (I guess, other than not checking what I *SHOULD* have been looking at, slashdot).
So, bottom line, if you want to trade in an IPO, check back about ever hour until it shows up, or do what I'm going to do...get another account with a different online trading company.
I hope I get in. I have about $1450 so if it goes over $14.50 a share I won't be able to get in. Did I get the first post?
Anyone has info on France's Pasqua laws?
Thanks
Some people work all their lives to kiss enough ass to be invited into the "good ol' boys" network. They don't need to hear your whining and complaining. Nothing is ever handed to you on a silver platter in life buddy.. well.. ok I guess there is inheritence... but other than a few measley million dollars.. nothing.
Ah, the joys of being a capitalist pig... hopefully (due to this IPO) I'll be able to retire in a few months and spend full time working on open source software, not a care in the world. Thanks, Slashdot!
Companies like to have their stock in the hands of people who own it, not speculate with it.
Ordinarily, if you flip the stock, you are not bad -- just useless. The usual IPO deal is that the IPO investors get a sweetheart price in exchange for agreeing to be long-term stockholders.
If you show that you just want free money without bringing any commitment to the table, e*trade will note that fact, and will decline to do IPO business with you in the future. E.g. when VA Linux goes public, they won't allocate you any shares, because you revealed yourself as a freeloader last time.
Part of this is vitiated by the fact that the directed shares are Red Hat's payoff to people who *already* contributed something to Red Hat. But that means nothing in e*trade's eyes.
I'm hanging onto my stock. I'll sell it when VA Linux goes public so I can get in their IPO. Feel free to flip your RHAT, so that you won't get any VA Linux stock, so there will be more for me.
No matter *what* happens on the first day, I'm hanging on to my shares. An opportunity like RHAT doesn't come along very often. The more I look at Redhat, the more I think they are poised to dominate an exploding market. They're a pretty solid, high growth, 2 year investment IMO. If I flip the shares on the first day, I miss out on a potentially large chunk of that growth.
So here's hoping I get some shares allocated...!
I spoke with an E*trade broker, and they expected that the IPO price will go up to ($14-16/share). Just a rumor from an insider.
The only reason I signed up with e-trade was a shot at this ipo. I didn't find them recommended by any people I know who had already had accounts with them. Anyone else in the same boat?
"There's no way I can see they'd turn down my application -- I've got enough money and investment experience." Sure they could. I had over $100K liquid assets and many years of market experience and they turned me down anyway. Of course it would "compromise the integrity of the IPO process" for them to tell me why. Oh well. At least I made $75 off the whole debacle.
geez- I haven't heard back yet. Guess that means a no-go? I signed up for 100. Had an e*trade account but not enough to cover the 100 min share restriction.
How shares are allocated. We try to allocate shares evenly among all the interested participants. To reach that goal, we allocate shares in phases. In the first phase, we allocate 100 shares to each order submitted, in the sequence we received the indications of interest. In the second phase, we allocate another group of 100 shares to each person who requested more than 100 shares. We repeat the process until all the orders are filled or until we run out of shares to allocate, whichever happens first.
whiner!
When is redhat supposed to go public for us normal people? Tomorrow?
I called the IPO hotline to check on mine. Despite the fact that it didn't show up on the website, they still had my order. I'm not sure if re-placing the order would bump you to peon status or result in a double order. You might want to call the 888# in your letter to make sure it's all straight.
I believe you mean 6pm EDT, 5pm CDT, 4pm MTD, and 3pm PDT.
Gee... do you think I'll get them?
BE, beos opened about a week ago at 6, up to 10.93
same day, closed today at 6.
I struggled to get an account opened at e-trade, for Red Hat IPO, sent a cashiers check for 6k, got the account opened just a few minutes before the indication of interest opened, but my account showed 0 balance.
I talked to a broker who said that I could probably get in, but I never succeded. He said that the public traders would only get 100 shares.
So I missed it, but I am more interested in VA Research as I think they will be more profitable.
Heck.
BE, beos opened about a week ago at 6, up to 10.93
same day, closed today at 6.
I struggled to get an account opened at e-trade, for Red Hat IPO, sent a cashiers check for 6k, got the account opened just a few minutes before the indication of interest opened, but my account showed 0 balance.
I talked to a broker who said that I could probably get in, but I never succeded. He said that the public traders would only get 100 shares.
So I missed it, but I am more interested in VA Research as I think they will be more profitable.
Heck.
Of course no onw knows, but maby wating for awhile after everything ;)
gets moving, vill get us who don't have access to this IPO
a better price
And if a sizeable number of Red Hat investors have no problems using deceit in their financial practices, well, I'm glad I'm not counted among them.
Just riding my high horse.
no no no..
didn't you see all the articles from last week? they can't and don't check what info you put down in your application of interest... i'll bet you didn't know that i've been investing in IPOs for 2 years, and have a liquid net worth of over $500,000.
just lie.
they're not checking.
Thanks to careful planning and the advice of the investor types here on Slashdot, I got my customer profile approved and now I'm just waiting to see whether I'm lucky enough to get the shares.
Come on, baby... papa needs a new everything!
BTW, E*TRADE's web site seems to have very intermittent problems receiving information, and I thought it was going to be as bad as MovieFone's web site when Star Wars tickets went on sale. However, a quick reload will often cure that problem. E*TRADE, of course, is no stranger to heavy activity all of a sudden.
For more information, click here.
Annual household income: $25,000-$74,999 ... you'd say your experience level is: excellent
Liquid Net Worth: $100,000-$199,999
Current value of total invest portfolio: $20,000-49,999
Accounts at other brokerages? YYNY
How long have you been investing in:
Stocks: 2+ yrs
Options: 1 yr
Mutual: 2+ yrs
IPOs: 1yr-2yrs
US Treasuries: 2+ yrs
Muni Bonds: 1 year
Corp Bonds: 2+ yrs
Given
Are you aware the market is volatile: yes.
Financial Objectives: Aggressive Growth, Growth.
Affiliations: no for everything.
Voila! Your profile is accepted!
Is your account funded yet? If not, try again when you see money in your account.
I did get the letter and was able to participate, but honestly, the biggest monetary rewards are yet to come. It really is a matter of "do what you love, the money will follow." Already e-commerce companies are starting to list "Linux expertise" pretty regularly on their job requirements, whereas if you read Windows job postings, between the lines they're pretty clearly all about dreary scut-work with the aging Windows code base. The economic message of the times is pretty clear: if you're a good Linux sysadmin or developer, the market is going to fill your pockets handsomely in the years to come. But don't let it corrupt you--in a few years time, don't forget to spare some change for the Visual Basic developers huddled around trash fires downtown...
So today my coworkers told me E*Trade was opening their IPO doors, and sure enough, they were. I logged into my account, went to the IPO page, and my old indication of interest was gone! It said I still needed to fill out the application. So I went back to step 1, and conveniently, all of the fields were already filled out with the values I gave the broker over the phone. I crossed my fingers and clicked submit and I got approved (thank God!). Then I clicked through to step 2 and step 3 and resubmitted my order for 700 shares.
Better safe than sorry, I thought, but that's still pretty weird... Of course, now I'm wondering if, by reentering my order, I just got bumped from the "privileged contributor" echelon to the same priority as Joe Random E*Trader. Or if my old indication of interest is still hiding in the system somewhere. Either way, I'll be glad when this whole thing is over!
--
Jake
Why do people look for conspiracies? If you want to figure out the motive of 99.9999 of the companies out there, look in the dictionary under the word "profit".
If you might get hosed by being an idiot and betting on an IPO (or any stock), they don't want to have anything to do with you, because you might bad mouth them, and lose them profit.
Read the RedHat prospectus. It contained many many pages of why it might fail. They're all there to help prevent liability suits. Why?
Getting sued isn't profitable.
So stop griping about not getting in because you're not part of the good old boys network. I got in because I could provide proof of having a clue. And that's still no guarantee...
All the technology in the world won't hide your lack of vision, talent, or understanding.
They're accepting letters of interest, but you still have to meet their qualifications first. So, unless you've got scads of cash and years of trading experience, you'll still be rejected.
-dwd-
I put in for 700 share's at $12.00 range, of course it
will probably be higher, but hopefully not too much.
To the above poster, man I'm crossing my fingers for ya... STAY UNDER $14.50 (rubbing my mojo:)
peaCe
Awesome!
If it makes you feel anybetter I wasn't invited by RedHat, but I am a diehard Linux supporter.
Also, wait after a week the price will drop. Also end of August is ALWAYS a bad time for the market. Buy then it will be low.
PeaCe
Awesome!
And I didn't get the letter, but because I got an account on etrade a few months back, I apparently have my foot in the door for some share.
We shall see though.
-Ben
bensmith@biz1.net
Basically, they're just covering their asses.
I was at Tarzan with my 6 year old during the 2 hour window. I then called e*trade at 6:15 EDT and was told tough luck. but a friend at Red Hat told me to pay NO ATTENTION to e*trade but to go to the URL from "the letter"
I did that (and I hope I'm still glad in a month). everything worked including passing the profile. I put in my contitional offer and hey hey hey let's see what's up next.
Certified Black Helicopter Pilot *** Unwitting Dupe of One World Gov'ment
Mistakes happen. :-)
--
E*Trade pretty much tells you to lie. This is their way of relieving themselves of any imagined or real liability. If you lose your shirt, this way they can say that you've lied, and that they're not responsible.
Frankly, I'm completely disgusted at the way they've done this. There's virtually no chance at all that the SEC will investigate, but, on the chance they do, some heads will definitely roll.
--
Is Red Hat really worth that much?? I notice Be has sunk to $6
I've not done IPO's before, but hey, I believe in this company - so for the last couple of weeks, I had a nice shell script monitor their website. When it popped up, I was paged. By chance, I'd submitted my interest in 100 shares already, though. ;-) Okay, only 100, but I can't afford much more. I hope I get them.
I got in and approved for the IOI. Now I just gotta be lucky enough to get allocated shares.
I had a Perl script running the past few weeks that checked the ETRADE IPO page every ten minutes and paged me when Red Hat appeared. I got a page at 1:30 PST and got in right then.
Ain't technology great?
-geekd
The indication of interest closure was for people
NOT invited by Red Hat to participate. (anotherwords, for random E*TRADE customers).
Those who were, can still express interest, though
you may have to do so by telephone (as I did).
Their phone number is 1-800-STOCKS5.
You'll still have to have an account already set up, and mention the directed share affinity program (and you may need the invitation mail
in front of you to verify you were invited).
So don't panic yet!
Brokerage houses are largly self regulating. If they are perceived as 'playing fair' by the other brokerages, the other brokerages will continue to trade with them.
One thing they all try to do is keep the newbies at the shallow end of the pool. Since so many new traders consider themselves experts, they do the screening by asking a few questions that any experienced trader should pick up on. These are often questions like the ones you saw, or questions about the number of trades you've made this year, etc. It's like school. Its easier to answer the questions when you know why they are being asked.
The last thing they want is to get the reputation of selling heating-oil futures to the senile.
$0.02
-Scott__
-Scott scott@surrealistic.org
Again, those of us who work for Wall Street firms are shut out as most brokerage houses' rules say employees can't trade using accounts other than ones in house. We have to wait until these issues are in the open market and then we can attempt to buy them.
I still think VA Linux is a better investment than Red Hat.
IPO applications just closed for Red Hat ... missed by a few minutes
IPO closed at 6pm PDT ... missed by a few minutes
i tried to sign up for the ipo, and i got the message "no accounts are currently available". i guess they've already closed this offering, or they just hate me.
Good points, but one that needs to be clarified: E*Trade says it would prefer that you hold on to your IPO shares for at least 30 days but doesn't prohibit you from selling whenever you want.
If you sell before 30 days, though, E*Trade says you might get lower priority in allocations of future IPOs you're interested in. E*Trade's reasoning is that it can get in on more IPOs if it has a record of helping newly public companies gain stability in the aftermarket. I suppose that makes sense.
So one question I have for all the other geek investors here: If RHAT opens at, say, double or triple the offering price, do you sell right away or hold on at least 30 days? And aside from what E*Trade might think of you, if you sell on Day One, does that make you A Bad Person?
Freedom's just another word for nothing left Zulus
No, the week before last -- when the IPO market was still red-hot -- several companies bumped up their ranges within days of pricing. If I'm not mistaken MP3.com raised its range twice in the last week before coming out, and then priced at or just above the top of the final estimated range. (Now MPPP is down more than half from its opening-day peak of 60+ ...) Just today Homestore.com more than doubled its range from $8-10 to $18-20, with pricing expected tonight for opening tomorrow.
OTOH, Be Inc. lowered its range just before coming out. But I wouldn't draw too many inferences from BEOS for a Linux-related IPO.
I also wouldn't draw great inferences from RHAT (OS vendor/supporter and wannabe Web portal, and *not* in that order, if you read the S-1) for VA (hardware vendor and already far more successful Web portal, with linux.com currently getting 10x redhat.com's traffic).
Freedom's just another word for nothing left Zulus
I'm 18, so I don't think I would fit in in the "good ol' boys" network. The key is not connections, it's not inheritances, it's lying. E*TRADE practically encouraged people to lie the last time around.
For more information, click here.
If it's oversubscribed (as it will be) they'll randomly allocate blocks of 100 shares. I read somewhere that they've got 800,000 shares to allocate and that RedHat sent out about 8000 letters, so there should be a pretty good chance to get your 100 shares. Putting in a larger order isn't going to increase your chances of getting anything, since it's random allocation. I believe that just by good luck someone who put in for 200 could get the lucky die roll twice, while you wanting 100 could miss, but obviously that's just the luck of the draw - it doesn't actually help your chances to put in for more.
How many people really think that they're pretty much guaranteed to make (vs lose) money on this?
1.800.flowers.com and three other IPOs recently opened down from the IPO price, and the net stocks are currently cratering. AOL which was 130 a few weeks ago is right now at 76... The market's been looking pretty sick for the last couple of weeks, and may be getting worse rather than better.
I'm a bit surprised that RedHat hasn't (yet) decided to postpone the IPO, and wait for the market to look more inviting.
I'm signing up to buy what I feel I want to risk, which is $10,000. In any case, us "insiders" can only buy from our allocation, which isn't too big.
-russ
Don't piss off The Angry Economist
I entered a new Peon order for 1K, and my preferred order for 500 was still there.
-russ
Don't piss off The Angry Economist
In other words, just like *all* of their IPO's?
Seriously, I just figured if they usually opened around 2PM PST and the friends and family closed on the 3rd, that the 4th was the day to play.
So I checked about six times today and lucked in.
Will in Seattle
Both are good. But Capital Preservation is bad, it means you can't tolerate losses. As is Income, since IPOs don't usually have income for a few years.
I said yes to AG and G, and no to CP and I.
Will in Seattle
on the phone to them, one of the guys found out that anyone who got in on the Conditional Offer has the same basic chances as follows:
...
A. First, do all offers have enough money to cover 100 shares at final IPO price. If not, drop the offers without cash to cover. So if you've only got $1000 and it's $12 per share plus $14.95, you're out.
B. Second, do the remainder of A cover all of the shares available. If more shares remain, go to C. If less shares, randomly allocate 100 shares to those who were in the remainder of A.
C. All people with 100 shares or more offers are filled with 100 shares. The remainder is now randomly allocated up to the amount specified. Not sure of the allocation past this point.
D. If bump up in IPO, requalify all. Apply limits if specified and drop out those under limits. Not sure what happens to those who checked IPO price range.
E. If the wire didn't reach them by end of day prior to IPO, too bad. 8/10 is day prior now. Not sure what happens with checks.
F. IPO happens.
G. If you sold your allocation in full, you are on bad list for IPOs, unless you have so much money they don't want to lose you as a customer (a million, say). If you sold part of your allocation, it depends on how well this worked for handling the float - if it let the IPO skyrocket but not have a spread of more than $5 (perhaps), then maybe they'll consider it. If you sold none, they love you.
Of course, when it drops below $5 the next day, you're not so happy, but at least E*Trade loves you
Will in Seattle
Seriously, what did you expect?
If you want full service, pay for it.
Will in Seattle
Just completed the Questionnaire and, after filling it out honestly (which you may not want to do unless you've got a lot of cash and have traded for a few years as an Aggressive Growth trader), was approved for conditional offer.
...
Hope they don't reprice, but since tech IPOs are down, maybe we'll luck out.
Hard to read a 96 page document that fast
Will in Seattle
Whoo, that was fast!
I got in at 1:45 PM PST and after checking if a few of the Linux geeks here were doing it, ran into one who hadn't at about 3:00 PM PST. He had just that day got his account active, and managed to get in for 100 shares. Probably one of the last ones.
Will in Seattle
Well, it could happen. This is risky business.
My grandma had a stock certificate for $10K that was worth nothing, whic she kept in her safe deposit box from the Great Depression, to remind her that this can happen.
Of course, she ended up dying a millionaire, but it's still pretty risky.
Will in Seattle
Yeah, like Salon.com (SALN), which trades for $8.50 now and IPO'd at about $10. I've got 250 shares of them that I got at $9.50.
If you can't stand the fire, don't play on the stove.
Will in Seattle
But then, we've got lots of cash stuffed away in retirement accounts here. And a bunch of us worked for local hi-tech firms and have exercised stock options before.
I doubt we're typical of most Linux geeks, though.
Will in Seattle
If you want the IPO and have an E*TRADE account.
If it's still open.
If you don't have an E*TRADE account, the IPO is August 9 (Monday). Only market orders will tend to execute for most of the day, not limits.
Your best bet is wait till end of August or early September for the post-IPO dip, when you should be able to pick it up in the $20+ range, as opposed to first day, when it might be over $40 per share.
Will in Seattle
Seriously, do you have the cash to cover a double order by Wednesday (Monday + 2 days)?
Will in Seattle
The comments says this offer was good 'til 5pm CDT on 4 Aug., but unfortunately the message didn't hit my email-box until 9:28pm on 4 Aug.
:)
C'mon, folks -- let's get the mail out a little earlier, please
Richard (aka Merwyck, aka QuaDZeRo) I blog at http://richardharlos.com
However, take this with a grain of salt: they're known to have lied to other questions, so maybe this one as well.
Actually, most Goldman Sachs customers are "indirect" customers: they submit their order (of affordable value) through their bank, which consolidates it with similar orders, and then forwards it to Goldman Sachs.
I called them at that number, and they reset my profile without any problems.
Btw, you could have used that extra money in your E*Trade account to short E*Trade (wouldn't that have been ironic): since Monday, EGRP dropped from over $30 to $23 3/4. Now, unfortunately, it's too late: I don't think it can fall any further.
Actually, not -- I just got off the phone with an E*TRADE customer service person (the # on the offer letter from RedHat), resolving a problem on E*TRADE's part, and he ("Matt") said that the the Friends'n'Family program with RedHat has a deadline of August 7 (if you got RedHat's letter).
Unfortunately this is still a theory that's not proven by the facts ... E*TRADE is having problems with my (new) account. Evidently they didn't upload my account into the IPO database, so I can't advantage of the F'n'F for RedHat yet. A broker took my "indication of interest" over the phone; I sure hope that works, since he thought the IPO pricing would happen tonight (so, maybe no 7-August deadline.)
The annoyance: I did everything E*TRADE said to do, like getting a funded account by August 4. There's no way I can see they'd turn down my application -- I've got enough money and investment experience.
If I don't get a real shot at these IPO shares, it'll be because of a fuckup on E*TRADE's part, pure and simple.
- Jojo
No more conditional offers.
So after checking etrade's site almost daily, after having had an account with them for close to 2 years, after being loyal and not switching to one of their many competitiors with lower prices, this is what the loyal customers get: nothing.
The IPO was open for just hours, with no prior announcement, no notice, nothing.
Way to go etrade! You've just lost a customer!
-- misaff
I find one thing very odd about this whole Red Hat IPO controversy. So far, the scenario has been:
1) Red Hat decides to reward OSS programmers by giving them invitations to a slice of the IPO pie.
2) Invitees rush to apply within the deadline, and then are told of this weird "eligibility" thingie.
3) Some get through, many are declined, leading to much confusion, bile, and foaming bitterness.
So far, so good. What is very, very strange is that many seem to finger this on the fact that the Eligibility Criteria is designed to weed out inexperienced investors based on their lack of wealth, presumably because
a) They may be making an unwise decision by investing in this IPO, and E-Trade is preventing tender young rookies from doing so.
b) Even if the invitees were major code contributors, the IPO managers want them to be, in addition to that, astute and sharp investors.
What's wrong with this picture?
Firstly, as for eligibility criterion a), this is complete and utter balderdash. Money is money - a poor student's $1000 is worth exactly as much as a brilliant Wall Street wizard's $1000 as far as the recipient is concerned. If a startup wants money, the startup tries to impress the investor, not the other way around.
Secondly, if Red Hat/E Trade wanted only 20% or whatever % of those who got the letter to actually invest, they would have sent it to only those people. Processing hundreds of thousands of dollars and then rejecting thousands of applications takes a lot of overhead, bad publicity, and massive amounts of embarrassment for Red Hat. Obviously this was a miscarriage of judgement.
If you really think Red Hat/E-trade denied giving them the stock because they only wanted to take money from savvy investors, I have a bridge to sell you. Do you think E-Trade is spending the tremendous resources it takes to weed thousands of bad/poor investors who are giving money, to protect *them* from making a bad decision?
My guess is - they decided to do this Letter Bonanza as a good gesture that would bring good publicity and strengthen their bond with the open source people by giving them an inside edge. They sent out offers, but then the Wall Street suits (or RH bean counters) cringed at the idea of throwing away so many discount coupons. But..... the offers had already been mailed - and the only way to cut down the number of IPO recipients was to devise a plausible sounding idea. Wait, it couldn't be random, and there was no way to recall offers without angering hundreds of people. So someone came up with the bright idea of
The odd thing is - it actually worked. People here are really believing that they are being chosen based on their investor potential. Do you think E-Trade/Red Hat/ or any other entity which is *receiving* money thinks how good the donor is? You only worry about financial worth when you are *giving* money - never when you're getting it. And even if you decide to give a major discount as a goodwill gesture, you don't care how good the donor is - so long as he/she has the $.
It's completely random (or has some simple arithmetic algorithm to make it seem that they are selecting people who enter big numbers), and a smokescreen designed to crawl back from their financial blunder.
This is why the guy who called them was given a dismissive explanation - obviously they can't do a full-scale recall and make it sound realistic with such a dumbass explantion.
L.
PS - I have no connection with RH, I haven't gotten the letter , and all of this is pure speculation. It just surprised me that so many people went for this eligibility criteria thingie, which smells gimmick from a mile away. If someone here has an IPO/finance background, please respond.
That is one of the most horrible things an investor can say... "I don't think it can fall any further"
In fact, just look at it today, down another dollar.
I see people looking at stocks that have fallen from around $38 to $1.50, and they buy it thinking that it can't get any lower. Well it can, it can go a LOT lower.
So do you plan on living off of social security when you retire?
Those stockbrokers that you refer to as scum, also provide you with the means of funding your retirement in the best possible way. People that invest for the long term in quality companies, do get rich (it just won't be over night). People that invest in bonds and CD's over the long run are lucky to keep ahead of inflation.
You need a broker (and yes, there are ones who actually do have your best interests in mind) to provide for yourself in the best manner possible.
That is why I do not like online brokerage firms... they *DO* promote "get rich quick" schemes. They *DO* promote frequent buying and selling, to get your commisions.
Find a real, in-the-flesh broker who you can trust. It may take you a few tries, but there are numerous, hard working brokers out there who genuinely care for their clients. And there are a lot more of them , than there are online brokers.
Oh, christ, what do you expect? This is the stock market. Stockbrokers are scum. Period. They make a lot of money on people's greed. The stock market is a magnet because people have heard they can get rich quick with it. Sound familiar?
Of course e*trade is making a lot of money here; you expect them to have pure motives? If you want a socially responsible means of raising capital, don't go to Wall Street.
...I don't think RH will go above the $12 asking price before going public.
Looking at other companies that make IPOs, most of them change the range one to two months before they go public, not the last couple of days. Still, I hope that RH doesn't go above $14.50/share either, or else I'm gonna have to come up with some quick cash. I think I have an extra kidney around here somewhere... Any takers?
Incidentally, I think that VA could go well or not well. I think that if RH does well, then VA will do really well.... But OTOH, if RH does crappily, VA will do REALLY crappily. (Stocks will play according to similar stocks when there is no significant non-technical difference.)
I currently have no clever signature witicism to add here.
How long is your script? :-) :-)
Mine's 6 lines, 272 characters.
Including "#!/usr/local/bin/python"
It's 6:01 EDT (5:00 CDT) and the IPO is still available.
Now if my account would only work dammit !!!
Now, I wonder what my odds are at actually being granted some shares. I only had money in the account for 100 shares, so I wonder if that'll hurt me in relation to some of the swingers around here who have like 4000 on order.
Of course, from E*Trades' perspective, they're better off selling 40 100-share orders than on 4000-share order, since the commission is the same anyhow (40*$19.95 vs. 1*$19.95). In any event, I hope I do get some shares and that RHAT does do well; I've been losing money like nuts this week so far. =(
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Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
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Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
Actually, I don't either, given the recent tech IPO flops...
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Oh well. I guess I need to put in an application to the "good ol' boys" network and see if I can get a break for once. I wonder if the "good ol' boys" require me to send a couple of grand before finding out if I'm ineligible. I hear that once you are one of the "good ol' boys," you can just sit back and let the $$$ flow in. That's nice.
E*Trade is no longer accepting indications of interest for the IPO.
Anyone who feels left out may revel in the knowledge that if it goes anything like the 1800flowers IPO, it will be a much better bargain in 3-6 months anyhow.
This makes no sense to me.. but here goes...
/. and got all excited, like everyone else, and flew over to E*trade. I signed in, using the account I set up a few weeks ago specifically for this IPO, filled out the profile and BOOM - dream over - told I was not eligible almost as soon as I hit the "submit" button. So I called E*trade and this is how it went:
I saw the IPO interest opening announced on
I went to customer service and spoke to Nellie, a very sweet sounding young lady. I told her I had signed up with E*trade for a specific IPO, was turned down, and was thinking of withdrawing my account. But first, I asked her if I could find out why I was turned down, this is what she said:
"Those profiles are reviewed by the people at E*trade that handle our IPOs and they would be the only one that could answer your questions".
To which I said, "The response was immediate, it is software that is making the actual decision, it has to be. How can I find out why I was declined?"
Nellie: "You will need to speak with someone who handles our IPOs."
Me: "Fair enough, can I speak with your IPO department?"
Nellie: "We do not have an IPO department."
Me: "What you have just told me makes no sense, is there anyway to find out why I was tured down? It seems to me that this would be my right as a potential investor?."
Nellie: "We cannot release that information because it would make it unfair for other potential investors."
Me: "Is there anyone I can talk to concerning this?"
She put me on hold... (about 3 mins)
Neliie: "Sir, it seems that the eligibility requirements are determined by the company who is releasing the IPO [Red Hat]. I am the end of your line for this I am afraid."
Me: "Hmmm, ok, thanks, g'bye..."
I wish that I could quote verbatum, I wasn't taking notes, and that is as close to the real conversation as I can get.. thought it was a little strange. Thought I would pass it on.
ALSO : I called Goldman Sachs (another RH underwriter) and they said they would be glad to help me if I fit their customer profile, which includes having a portfolio of $5 million or more...
EGADS !
Still poor with money stuck at E*trade (Have a few ideas for that wildcard in their name),
JedTheHead
My other car runs Linux...
Disclaimer: I'm not a stock broker, don't take this as a replacement for real investment advice, just a warning from an amateur stock-following-person.
Most people seem to be treating this as an easy way to make money. I'd suggest not spending any money on the stock that you can't afford to lose. If I read the information correctly, E*Trade is requiring you to hold on to the shares for at least two weeks before selling off. Tech IPOs overall do not have a great record over the first two weeks. They sometimes go up the first day (though interestingly, all four tech-related IPOs yesterday closed the day below their IPO price), but those gains rarely hold, and you won't be able to take advantage of them, since you're not allowed to sell off early. Most importantly, if you don't get in on the IPO, don't buy the stock as soon as it starts trading publicly. Almost all IPOs, especially tech-related ones, go down significantly from their market opening prices.
A few examples:
Be, Inc. (BeOS): IPO at 6, opened at around 8, currently at 6.
Mp3.com (MPPP): IPO at 28, opened at 92, currently at 29.
Both IPO'd around two weeks ago, so now would be your first opportunity to sell off the shares with E*Trade's policy. As you'll see, you'd make virtually no money with either one of them. If you didn't get in on the IPO, and bought when it the stocks started trading openly, you lost money - a lot of money if you bought mp3.com at 92.
Part of the reason mp3.com jumped and then nosedived is because people thought they owned the mp3 technology, then realized they didn't. This could potentially happen with Red Hat as well, as a few hours later people start realizing that Red Hat doesn't own Linux.
So, my non-expert advice would be, if you can get in on the IPO and can spare the money, buy it as a stock to hold for the long haul, not as a quick way to make money (since that most likely won't happen). If you can't get in at the IPO price, wait a few days for the stock price to drop off before buying some.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10