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.

Comments

Got in, now...

[Skyshadow]

So, I managed to get in! Yeah me!

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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I got in thanks to /.

[Skyshadow]

Yep, I noticed it here at about 4:57 CDT. Actually, I can probably safely say that I got in thanks to my trusty cable modem as much as anything else, can't I?

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Re: Expected price info ($14-16/share)

[mattdm]

Interesting. The E*trade guy I talked to said he didn't expect it to go up at all.

Actually, I don't either, given the recent tech IPO flops...

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Updated date info

[mattdm]

Just got off the phone with E*Trade. Expected price hasn't changed (still $10-12), but the expected date is now more specific: August 11. (Not merely "the week of August 9".)

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Five million dollars?

[mattdm]

Wow. That makes E*trade look a lot less evil.

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Actually

[mattdm]

I answered honestly, and I got in. I was pretty surprised -- I'd prepared myself for disappointment.

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allocation of shares

[mattdm]

It's my understanding (someone correct me if I'm wrong!) that shares are allocated in blocks of 100, so that someone who has placed a small offer has just as much chance as someone who has placed a larger one.

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Aggressive Growth vs. Growth

[mattdm]

I said that my goal is "growth", not "aggressive growth", and I was accepted. *shrug*

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Nice

[alenp]

Hmmm. So a bunch of ordinary E*Trade users get a shot at this while I still get denied, even though I was invited by Red Hat and they weren't.

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.

CLOSED

[Wanker]

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.

My conversation with Nellie....

[JedTheHead]

This makes no sense to me.. but here goes...

I saw the IPO interest opening announced on /. 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 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

Be Careful

[Trepidity]

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.