Best way to buy Twitter stock on IPO day?
November 6, 2013 6:10 PM   Subscribe

I'm a huge fan of Twitter and surprised how quickly they're going to IPO from the announcement just a few weeks ago (the IPO is supposed to happen tomorrow). I have no idea where to start, when to try and do this, how the process works for a layman. Is there any easy way to buy a couple hundred shares of the stock on the first day?

In the past I've done pretty well handicapping IPOs of tech giants with made up money in my head, so I feel like I'm ready to try it for real with a small investment (maybe a couple thousand dollars worth, total). The last time I bought stock directly was through an E-Trade account in the late 90s, and haven't dabbled since.

Are some sites (I'm thinking of Ameritrade and places like that) better than others? Is there any way to put a request order in before it hits the IPO to get shares early? Can I try and pre-buy $x worth of shares tonight that will auto-buy tomorrow when it happens?
posted by mathowie to Work & Money (9 answers total) 9 users marked this as a favorite
Best answer: I logged into Ameritrade. A banner says "TD Ameritrade is no longer accepting Indications of Interest for the upcoming Twitter IPO. For more information about IPOs, please see our IPO Center."

That IPO Center says:
Corporations can raise capital by issuing new or additional shares of stock for sale to the public. There are three types of equity new issues. You can apply to purchase shares of newly-issued stock available through TD Ameritrade by calling 866-678-7233.
My takeaway: I don't understand any of this stuff and it's terrifying. Maybe I'll just try to put in an order for 10 shares and see what happens.
posted by cabel at 6:25 PM on November 6, 2013

It's too late to get in on the IPO - you'll have to buy on the open market. If you're going direct through Etrade or Ameritrade you're essentially going to pay market price, which can skyrocket within minute or drop just as quick.

When went public last week I tried to buy as soon as it started trading and it blew right past my limit order so I was SOL.

I'm on the fence about Twitter. It was priced at $26. I have the option through Etrade of putting in an order for when it hits the market and buying at market prices or placing a limit order which will only execute if shares are available for my limit price or less.

FWIW: I bought FB after the IPO when it lost a fair amount of value. I'm happy today. I would have been really freaked about it if I had bought at IPO prices. Whatever you decide, good luck!
posted by FlamingBore at 6:28 PM on November 6, 2013

Imagine Springsteen tickets are going on sale tomorrow morning, but all the tickets have already been promised to the friends of the band, the arena owners, the Governor of New Jersey and his family, and every American Express cardholder. No tickets will be available at the box office or online when sales start at 8:00am. Oh, and we won't know if Bruce will play for 5 minutes or 8 hours until the curtain goes up. It might not even be Bruce.

That's a modern tech IPO.
posted by JoeZydeco at 6:30 PM on November 6, 2013 [13 favorites]

Response by poster: Huh, yeah, I logged into my existing Ameritrade investment account (retirement stuff is there) and got an unhelpful error when trying to put in any order for Twitter stock. I suppose I'll watch it in the early morning, if it doesn't go much above $30 from the $26 asking price, I guess I'll try to do it after trading starts.
posted by mathowie at 6:30 PM on November 6, 2013

Thanks to this question I'm looking at my Fidelity stuff (another weird small godsend from $tarbucks) and there's a message there about the expected initial open market price and approximately when it'll go on sale. I've only ever been awarded stock, so this is my first time looking into buying any on the open market too. Watched a few videos, played around with setting some orders—one good thing about the stock not being available is that it recognizes the symbol sometimes but never enough to put the order through, so all of these silly things I'm doing are a dry run.

Anyway, after the videos and a lot of red-eyed Terms and Agreements, I have a tab open ready to set a limit order for a few hours tomorrow morning. Basically I'm crossing my fingers that my lowball order will go through on 4 shares some time between 4am here (thanks again, sbux, I'll be up in the morning) and, I dunno? Maybe noon?
posted by carsonb at 11:00 PM on November 6, 2013

What JoeZydeco said. There is basically no way any regular person is going to get IPO shares. They've all been spoken for, by people with connections--not to Twitter, but to the bankers involved in the IPO.

BTW, to even be eligible to purchase IPO shares via Ameritrade you have to have either an account worth >$250k or have made 30 trades in the last 3 months.

This is a pretty good description in layman's terms of how an IPO works.

BTW, the next section in that series offers this bit of advice:
"Because of flipping, it's a good rule not to buy shares of an IPO if you don't get in on the initial offering. Many IPOs that have big gains on the first day will come back to earth as the institutions take their profits.

…Of course, some IPOs soar high and keep soaring. But many end up selling below their offering prices within the year. Don't buy a stock only because it's an IPO - do it because it's a good investment."
Keep in mind that Twitter is raising money. They keep that money, regardless of what happens to the stock price after IPO.
posted by danny the boy at 1:39 AM on November 7, 2013 [1 favorite]

Put in a good till canceled limit order for the price you want it at ($26 to $30 sounds reasonable), then let it ride. You might not get the price you want today, but that order will surely be fulfilled before it expires in a month or so.
posted by limeonaire at 7:29 AM on November 7, 2013

it's already trading near $50. hopefully that'll come back down after the initial madness.
posted by carsonb at 8:14 AM on November 7, 2013

Response by poster: I ended up putting a limit order of $32 last night, but I suspect it won't happen today. I'll wait six months and revisit to see where the price is at, I suspect the stock will take a bit of a hit when employee stock holders can sell their shares after 180 days.
posted by mathowie at 9:52 AM on November 7, 2013 [1 favorite]

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