Friday, December 13, 2013


Back in September, I received an alert from E*TRADE about some new initial public offerings (IPOs) that they had available. These were Five Prime Therapeutics (FPRX) and ClubCorp Holdings (MYCC). Although I didn't know much about either company, I decided to put in orders for both new issues.

I have written about buying IPOs before. While getting into an IPO can be a way to make money quickly, I have warned that not all IPOs go up in price. And there is no guarantee that you will be allocated shares in the first place. It turned out that I was allocated 200 shares of MYCC which went IPO at $14, and I received only 40 shares of FPRX which priced at $13.

Neither of these IPOs rocketed up on the first day. Of the two, ClubCorp has been more stable. However, Five Prime had more of a rocky start. From its initial price of $13, FPRX dropped as low as $8.02. Then things started to change, FPRX went up 50% in the last week, and 17% just yesterday. I didn't see any significant news, so I am puzzling as to why.

Anyway, I hope that my IPOs continue to do well. My only regret is that I was allocated so few shares of FPRX. If anyone has a theory on why FPRX is shooting up in price, I would like to know why.

PF Stock

Disclaimer: This material is for general information only. It is not intended as an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any security or fund.


  1. From my experience in small cap, low priced biotechs, I've seen the stock price shoot up for three reasons: 1) Positive public news such as successful clinical results; 2) Anticipated good news based on rumors; 3) Pump and dump activity. Sounds like FPRX rise is due either to 2 or 3. If it's 3, the price will likely fall back.

    Good luck.

  2. Thanks for you comment. As with a lot of recent IPOs these can be risky investments. I will probably put in stop orders to limit my risk if the stocks fall in price.

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