<p>Artloversplus, I understand. People who bought the ipo dont have that restriction.</p>
<p>“Sure there’s a nice buzz from the big day one pop, but the friends of GS, MS, and JPM who got shares were gifted a billion dollars. Money for nothing.”</p>
<p>That is how the world works. This happens all the time. The ipo market has been scorching hot.</p>
<p>When I used to comment about things similar to the above, I was called a socialist. :)</p>
<p>^^hey, socialist views or not, if you are adept enough to get a great deal like that now and then, good for you. Though… you ought to be taxed as much as those of us who make $$ through work.</p>
<p>^:) If short term, it is taxed at the same rate as the ordinary income, isn’t it? stark is selling within a year to pay as much tax as those who work :)</p>
<p>Does anyone know how healthcare tax on investment income works?</p>
<p>
I get that. I’m just saying, if it was my company going public, and my investment bankers (who I am paying 10s of millions of dollars) either screw up or deliberately set too low of a price, and I get only 60% of what I could have… I’m not happy.</p>
<p>I wonder how much the bankers bought for their own accounts, either personal or company?</p>
<p>Maybe I am too cynical.</p>
<p>Good point, iglooo</p>
<p>Igloo… No I am not.</p>
<p>
If you income is over $200K (single) or $250K (married), net investment income that causes you to exceed that amount gets hit with a 3.8% surtax.</p>
<p>The definition of “net investment income” will lead to massive heartburn for your tax guy.</p>
<p>[Overview</a> Of The New 3.8% Investment Income Tax, Part 1 - Forbes](<a href=“http://www.forbes.com/sites/anthonynitti/2013/04/26/overview-of-the-new-3-8-investment-income-tax-part-1/]Overview”>Overview Of The New 3.8% Investment Income Tax, Part 1)</p>
<p>If you want an idea of how complex the net investment income stuff is going to be, take a look through this:</p>
<p>[The</a> Definitive Questions And Answers On The New Net Investment Income Tax - Forbes](<a href=“http://www.forbes.com/sites/anthonynitti/2013/11/01/the-definitive-questions-and-answers-on-the-new-net-investment-income-tax/]The”>The Definitive Questions And Answers On The New Net Investment Income Tax)</p>
<p>Oy.</p>
<p>Twtr’s ipo price was raised twice. There was huge demand at 26. If the stock was priced at 36 Maybe the demand would not have been large enough at 36. FB raised the price and increased the shares issued and that the ipo was a bust. </p>
<p>Firms and investors arent interested in buying ipos unless they think they are going to get a deal. </p>
<p>Having said the above, if twtr really left $700 million on the table, that doesnt help the firm.</p>
<p>If ipos are working more ipos can be sold.</p>
<p>
How do you figure?</p>
<p>They sold all of the shares at the IPO price. Isn’t that successful by definition?</p>
<p>And in fact, FB opened at $42, with an IPO price of $38.</p>
<p>Are you saying that if the IPO price had been $28 instead of $38, the price would not have dropped to $19 (or wherever it bottomed out)?</p>
<p>What is your definition of a successful IPO?</p>
<p>notrichenough (who isn’t), I bet you the folks at Tweeter are very happy today.</p>
<p>“What is your definition of a successful IPO?”</p>
<p>That the stock rises in price above the ipo price and stays above that price for awhile. We have mulitple parties…the company, the underwriters and the investors…</p>
<p>You want them all too feel good. It is game theory. How do you maximize the best for all the participants? People have to leave stuff in the table. </p>
<p>This pricing of ipos is not an exact science.</p>
<p>If you watched CNBC you could see the potential opening price of the stock fluctuate.</p>
<p>By the way, the stock got hit a little today.</p>
<p>“Are you saying that if the IPO price had been $28 instead of $38, the price would not have dropped to $19 (or wherever it bottomed out)?”</p>
<p>That is possible…</p>
<p>
No doubt. Some of those folks are now millionaires or billionaires on paper.</p>
<p>
I get that, and I get that the prospect of a quick profit gets people excited and willing to invest, and gives you some margin if the price does go down, but…</p>
<p>75%???</p>
<p>To me that seems like either incompetence or malfeasance on the part of the underwriters.</p>
<p>When an investment bank underwrites an IPO, are they allowed to assign shares to themselves? Seems like that would be a big conflict of interest, but does it happen?</p>
<p>“investment bank underwrites an IPO, are they allowed to assign shares to themselves? Seems”.</p>
<p>No</p>
<p>I shouldnt say no.</p>
<p>The firms could have kept some shares. They are going to help make the market in twtr after the opening. If somebody bailed… I dont know who would.</p>
<p><a href=“http://www.briefing.com/investor/learning-center/general-concepts/how-ipos-work/[/url]”>http://www.briefing.com/investor/learning-center/general-concepts/how-ipos-work/</a></p>
<p>“On the day of the IPO, when the investment banker is certain of selling all of the shares, the deal closes. The shares, all of them, are purchased from the company by the investment bankers. The price paid is the IPO price minus the commission.
The bankers then sell all of the subscribed shares to the institutions at the same time for the IPO price. If any client withdraws their bid, the bankers own the shares and either hold them, or sell them to someone else. On hot IPOs this doesn’t happen much, but it does happen.
Note that the transaction between the client subscribers and the investment bankers always happens in accounts at the investment bank. A credit for the shares is placed into the client’s account, and a debit for the cash is made, all at the same time. None of the clients get a “head start” on any of the others.”</p>
<p>Read more: <a href=“http://www.briefing.com/investor/learning-center/general-concepts/how-ipos-work/#ixzz2k6gufhaF[/url]”>http://www.briefing.com/investor/learning-center/general-concepts/how-ipos-work/#ixzz2k6gufhaF</a></p>
<p>What does it actually mean to a company if they sell all of their shares at full price during the IPO and then it were to drop, say, 25% the following day? What would be the actual negative effect to the company?</p>
<p>IMHO, no negative effect in the short run! The company got its money at full price and the investor is holding the bag. In the long run, if the major stock holder wants to sell his restricted share, the market may not like it.</p>
<p>Thanks, dstark.</p>
<p>I wonder if a company has ever sued their underwriter because the IPO price was so much lower than the first public trade.</p>
<p>If you have a twitter account, I’d highly recommend you follow Florida Man:</p>
<p>
</p>
<p><a href=“https://twitter.com/_FloridaMan[/url]”>https://twitter.com/_FloridaMan</a></p>
<p>:cool:</p>