Buying stock before they go public?

**thomsoad** · 04-07-2011, 10:45 AM

Originally posted by fruitbowlk View Post

Have anyone on SA brought stock(s) before they went public?

I personally have not. Statistically speaking they are an incredibly bad investment. Most (and I do mean most) go down substantially after the day of offering.

Before the offering is even worse since the financials of the company havent even been made public yet. Unless you have some insider information I wouldnt touch it.

**dczech09** · 04-07-2011, 04:35 PM

Investing in IPOs (initial public offerings) is very risky. If an IPO does have a lot of promise for success, generally it will be more difficult to get shares of the IPO because the market will be so saturated with inside investors. I recommend staying away unless this is your business or you have connections.

**cashrich** · 04-08-2011, 10:14 AM

I was thinking to buy Facebook IPO whenever it is launced. Also came to know recently that I need atleast 50K for IPO...is this heard of before any thoughts. Why do they need 50K to start with can't I just invest 5k or maybe 10K?

**jpg7n16** · 04-08-2011, 12:23 PM

If you are talking about IPOs - then it's too late, the company is already public as soon as it initiates the Public Offering.

If you are talking about buying a private company, and then taking it public - I've never done/been part of that, but I work on funds who do

**Mr Nice Guy** · 04-08-2011, 04:16 PM

Originally posted by cashrich View Post

I was thinking to buy Facebook IPO whenever it is launced. Also came to know recently that I need atleast 50K for IPO...is this heard of before any thoughts. Why do they need 50K to start with can't I just invest 5k or maybe 10K?

Im not exactly sure why they require a minimum of 50k, but I am assuming it is because they want more committed investors?

For example, Berkshire Hathaways A-shares of the common stock are trading close to $125,000 per share

This is because Buffet doesnt want the volatility of traders buying and selling. He wants people to buy n hold.

Im not sure though, this is my elementary opinion...

**Lindsey23** · 04-12-2011, 10:36 AM

I was once about to buy some stocks before they wont public but most of the time they wont work

its a risky thing to do
I would advice you not to invest money that you don't want to loose

**bennkar** · 04-13-2011, 03:50 PM

I bought private stock in an old employer in 2001-2002. Actually it was profit sharing money where we had the option of private stock of our company or put it into our regular 401k. I used about $2500 those two years on private stock. This past summer everyone was forced to sell the stock back to the company - my guess was they were planning on being bought. In any case, I ended getting $9000 for the stock. It had been valued at $4500 based on the last company statement. In my case I wished I had more, but like other said, this was probably the exception to the rule.

**JessieHanz** · 04-14-2011, 05:32 PM

Personally, I haven't done that.. I don't think buying a stock before they go public is a good idea unless you are a hundred percent sure for its quality.. As Lindsey23 said, it's really putting your money into risk..

**JBinKC** · 04-16-2011, 07:29 AM

Personally, I haven't invested into private equity however I have friends who do. They are risky but those investors get the true rewards like those people who invested into the good IPOs 20years ago or earlier. IPOs I think in general they are very unattractive today because the companies are made public much later in their development cycle, extremely overpriced in the offering and share holders are basically buying an operation almost fully mature and the potential growth component is almost gone..

Buying stock before they go public?