*cues gansta-rap music*😎
Even in the midst of a wonderful Korean vacay, yours truly has not forgotten the markets.📊
Sanli Environmental Limited’s Initial Public Offering (IPO) has come and gone, and if there’s one thing learnt from the whole experience of investing in this IPO, it’s truly a game of poker’s:
One little investing trend I’d like to share today is something I call: “first day IPO“.
What is it?
A quick recap: An Initial Public Offering (IPO) occurs when a company goes from being privately held to publicly owned with shares trading on the stock market.
So…why first day IPO?
Often a new stock will go up significantly on the first day of trading, and investors who get in early can make a nice profit. The offering price and opening share price of an IPO are a big part of the first-day results.
Source credits: The Nest
The offer price is the IPO share price: S$0.225 per share for Sanli Environmental Limited.
After reading Sanli’s prospectus (the offer document detailing the company’s IPO details and financials) and doing due diligence (market research), it was time to decide.
To invest or not to invest?
The next thing you should know about IPOs is that they can be tricky hard to even secure – meaning, just because you want to buy them, doesn’t mean you can (unless you’re a big institutional investor, not a little retail one like me). On occasions I’ve tried investing in IPOs safely, only to end up paying the $2 administration fee to the bank.
So I went in (relatively) big.
(Let’s just say I ended up emptying my savings account, steps away from shaking out the coins)
And did it pay off?
The morning the stock started trading, I contacted my broker, Tom. Here’s what he said:
And at the time of this conversation, the stock price of Sanli skyrocketed to S$0.38 per share.
Tom, on the cautious side, wanted me to be doubly sure on the no. of shares I had to avoid the penalties of short-selling – in the time it took to double-confirm while zipping through the streets of Seoul, the share price dipped to S$0.37 per share. I had to act fast.
“Tom…the effect of first day ipo is dying –
please sell now“
And so he did.
How much did I make in that one trade?
Secured 7,000 Sanli shares x S$0.225 = S$1,575
Sold 7,000 Sanli shares x S$0.37 = S$2,590
How much did I profit?
S$2,590 – S$1,575 – S$40 (broker’s fee) = S$975😳
Total Return on Investment (ROI) : 61.8%
So now you know how it’s done!
So next time someone says: Get 61.8% ROI in the markets – it’s a scam! Impossibru?🤔
It can just be a matter of knowing when to:
Go Big Or Go Home😜!
Live long and prosper,