Post-IPO – How can Accendo Markets help?

If you are disappointed with your IPO allocation – whether you did not receive enough or any at all – and still see potential for a share price rise, you could buy the shares once they are listed. To save on costs and capital, CFDs are an alternative trading option on which no stamp duty is paid and a deposit of as little as 5% is required.

This option is for those that see growth potential in the company, or who expect demand from the investors who missed out pushing the price higher in the future. They also believe that this growth could lead to its inclusion on a major index like the UK 100 or 250, which could be a further driver, and may also find the implied dividend yield is attractive. Our traders can help you assess potential drivers to make an informed decision.

On the other hand, if you missed the chance to make a quick profit on the initial reaction as the shares traded for the first time, and believe there to be too much hype surrounding the IPO – overvaluing the shares ­– you could also use CFDs to short-sell shares, affording you the potential to profit from a decline in the share price.

There are cases for either approach, with Snap Inc (SNAP), Royal Mail (RMG) and the Bank of Cyprus (BOCH) are examples of too much hype with volatility and losses from the off, whilst BooHoo.com (BOO), Convatec (CTEC), Alibaba (BABA) and Facebook (FB) are good examples of slow burners. How will this year’s IPOs fare?

Note, past IPO performances may not reflect future admissions and are not a guarantee of future performance.

Pricing

IPO pricing tends to start in a range which is then revised up or down depending on institutional demand, then narrowed towards the upper or lower end of the range as time goes on and demand becomes apparent. This provides an approximate indication of the market value of the newly-listed company, although as Snap Inc proved, this can soon be amended once shares are freely floated.

Retail investors often have access to a portion of shares but often not quite as much as they might like, with the majority tending to go to long-term institutions such as pension funds, insurers and hedge funds.

Part of the service that our traders provide is to deliver breaking news on potential IPO dates of companies that you express an interest in, as well as notifying you of any changes to pricing associated with those IPOs.

IPO Timetable

Shares listing in the UK tend to start trading conditionally from Friday through to Tuesday, after which they gain full market listing and trade unconditionally from Wednesdays (normal schedule guide, subject to change). US IPOs tend to be quick affairs with a roadshow followed by pricing within a week before trading begins.

IPO Parameters

Newly listed shares tend to require CFD margins of 10-20%. Short selling is not available during conditional trading as shares are unborrowable, however they usually become available for shorting when trading goes unconditional a few days later. Guaranteed stops are usually unavailable until trading becomes unconditional.