In most IPOs, the vast majority of shares are allocated to institutional investors plus high net worth individuals who are favored customers of brokerages. Some of those buyers then flip their shares to retail investors just after the IPO for a quick low-risk profit.
Definitely. My aunt liked the service and put $100k into APRN around $5. It adds up.
> I don't believe that institutional investors don't look at financials.
Many don't, like indexed funds. They just try and keep their shares ratios inline with the market and rely on it always going up overall.
Re:Blue Apron lays off more workers
by phamilton on Wednesday November 14, 2018 @05:01AM
(#18448752)
Do index funds drive the price at all though? I would expect them to be net neutral. If the stock goes down they sell, if it goes up, they buy.
Yes they're mostly neutral. But when the stock goes down that's still real people losing real money from their pension funds to what are essentially con artists. The saving grace here is as nradov said, they won't buy into IPO's.
Very few index funds purchase IPO shares. Companies that just IPO'd aren't listed in indexes; it takes a while for them to be added. Then the index funds buy on the secondary market.
Re:Blue Apron lays off more workers
by AmericanChopper on Wednesday November 14, 2018 @01:19AM
(#18447911)
Snap comes to mind.
Do these actually exist? My understanding is that retail investors aren't significant and I don't believe that institutional investors don't look at financials.