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.
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.
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