How to buy shares of IT companies before, during and after the IPO

In the comments to our past materials (on the IPO and the Alibaba concern), readers asked questions about how to participate in these placements and become the owner of shares of well-known companies. Today we will look at this issue in more detail.

How to find out about IPO

Habra users were interested not only in how to buy stocks, for example, the same Alibaba, but also from where to get information about future placements on stock exchanges. This is not a very detailed process covered in the press - it is quite routine and consists in constant monitoring of special aggregator sites (here is an example of such a resource) or sites of exchange platforms themselves (for example, Nasdaq ). These resources usually have a calendar of IPO applications filed by companies.

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You need to be prepared for the fact that the majority of these companies are completely unknown to a wide range of Internet users, and many of them are planning not very large-scale placements.

How do investors buy stocks before an IPO

Everyone knows that the main benefit in the course of entering the stock exchange is derived by the company's shareholders, who became such in advance. For this, which is logical, it is necessary to invest money in the company. Accordingly, the amount of investments must be significant - otherwise it will be difficult to attract the interest of the company’s owners to the sale of part of the share. In general, in companies that are looking for investments, there is usually an employee responsible for investor relations who helps them determine the conditions and make the deal.



Another possibility of buying stocks is the so-called pre-market. Shares of a company gathered at an IPO can be bought before the underwriter (we considered its role in the general topic of an IPO ). Similar to ordinary investments in a company, the amount of financial injections must be significant in order to arouse the interest of the owners.

Purchase of shares after the start of trading

After the shares officially began their circulation on the stock exchange, they are no different from the financial instruments previously traded on the site. At first, after the start of trading, stocks are usually easier to buy, because on such days liquidity rises due to the general interest in the event.



For example, on the day of the Facebook IPO, more than 80 million shares were sold (and bought) in the first 30 seconds of the auction. Such a volume of operations was performed by high-frequency trading robots (HFT).



When trying to buy shares of companies that go to IPO, you should always remember about the possibility of a sharp rise in price on the first day. For example, in 2011, LinkedIn shares on the first day of trading increased in price by 109% - from $ 45 to $ 94.25 per share. Often, the price is subsequently adjusted and may even fall below the cost of the original placement.

How to buy stocks on foreign exchanges

In order to trade on foreign stock exchanges, you also need to contact your local broker to open an account (which is not so easy to do), or find a Russian broker who provides access to trading.



Shares of many popular technology companies are traded, for example, on the NASDAQ, respectively, a Russian broker will be needed who have access there (a good post for beginners about searching trading options on NASDAQ can be read here ). If the company that interests the investor is trading on the London, New York or Chicago Stock Exchange, then a Russian broker will be needed, having a partnership with companies operating on these sites (through ITinvest you can work with several foreign stock exchanges, their list is posted here ).

How to buy shares on Russian exchanges

It is easier to buy paper on Russian stock exchanges due to the absence of unnecessary links and complicated schemes. The main Russian stock exchange is the Moscow Exchange, formed after the merger of two competitors - RTS and MICEX. An individual cannot independently trade on the stock exchange on his own, for this he needs to be a professional participant and obtain the appropriate license.



Such licenses are at brokers and some banks. The list of operators, for example, on the stock market and statistics on them, can be found on the exchange website . In general, it is quite simple to open an account with a broker - you need not so many documents (we have an application for opening, you can leave it on the site). Then you will need to make money on a brokerage account, install a special trading software (we have developed our own terminal) and begin to conduct operations with stocks and other financial instruments.



IPOs on the Moscow Exchange are less frequent. One of the latest news on the topic is the intention to hold a placement of shares in the holding of the Slon.ru publications, the “Big City” and the Dozhd TV channel. In addition, Russian shares that are traded abroad sometimes make additional placements in Russia - for example, Yandex entered at the beginning of summer (we wrote a separate topic on how to buy shares of this company).

I want to buy one share and that's it.

Sometimes all of the above methods are not suitable for one simple reason - I want to buy one single share not for profit, but “for show” (I am co-owner of Facebook!) Or, for example, as a gift to a friend. This problem can be solved without opening a brokerage account. There are projects abroad specializing in the sale of securities of public companies that offer their shareholders special certificates of ownership (not all companies have such certificates, for example, Apple does not use them).







Sites like GiveAShare.com , OneShare.com or Uniquestockgift.com make it possible to buy a share at a market price without opening a brokerage account, but take an additional fee of several tens of dollars. The buyer needs to select the company of interest and fill out a small form. The certificate of share ownership can be “decorated” with various frames, engraved plates, etc.



That's all for today! Thank you for your attention, we will be happy to answer questions in the comments.



Posts and related links:

• How-to: How to buy shares of technology companies on the example of "Yandex"
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• Banks vs Exchange: where it is more profitable to buy currency
• Analytical materials on the stock market from ITinvest experts