Friday, December 13, 2013

IPOs: FPRX and MYCC

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.

2 comments:

  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.

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  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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