I think generally you can place an order before the market opens, maybe even the day before, but that doesn't really give you any pricing power. It will still pop at the open and your order may not clear until it does. But that may still put you ahead of the Robinhood masses.

Better option might be to try a pre-IPO trading platform like EquityZen.

From EquitZen's knowledge center:

"Shares that are the subject of investment through EquityZen are generally subject to a lock-up period of up to 180 days after the effectiveness of a company's IPO filing, during which time shareholders are restricted from selling their shares."[1]

The 180day lock-up period could EquityZen poorly suited for investors with a short time horizon.

In this case though, Coinbase is doing a direct listing, not an IPO. I think there is usually no lockup associated with a direct listing.

Er, PLTR still had a lockup for its direct listing. If this trend continues the “usually” aspect will not hold.

Could you do what Mark Cuban did and work with your brokerage to do sell calls & buy puts around the strike? That would lock in your price for a given amount of time.

should be the other way around - buy calls and sell puts.

that said, options usually are available a few days after the ipo, so may not accomplish the objective

If you had a sizable fortune at stake, you'd go to a major financial firm like Goldman Sachs, which handled the collar for Cuban, and they'll build you something custom. Almost any arrangement can be worked out, with a fat fee to go with it.

That only applies to IPOs. In a direct listing the shares start trading at the published reference price. There is no underwriting or other ceremony around it.

For a direct listing, does that mean Coinbase could conceivably charge any price they want for a market order given they are the only seller when it is first listed ?

Other existing shareholders can sell as well (there's no lockup), and I guess short sellers could sell immediately? But yeah issuing a market on open order for a new stock would be a "courageous" move (but IMO that's true of any market order - don't use a market order instead of a limit order unless you're genuinely willing to buy at $999 / sell at $0.01).

Could be a lockup still. There was for palantir.

CB just did a private offering through Nasdaq private market formerly Second Market. Couldn’t figure out how to participate in that.

I believe you need to email [email protected]

What you probably want is a snap to market order meaning that if you're buying, it will snap to the ask, selling, to the bid. I use snap mid orders, usually get decent fills without getting retail'ed.

This is always how it works. Institutionals always get first dibs (and the middle, and the last)

Not with a direct listing.

Coinbase shares would be subject to an auction and the market for them will open at the price where supply meets demand.

Not entirely true - since people had to enter a single point on their demand curve as a price and quantity of shares (instead of their entire demand curve) the market clearing price was artificially low. Hence the price pop on day one. To think about it more in depth - assume I enter a bid of 100 shares at $100. If the market clearing price is $50, I’ll be awarded 100 shares at $50. However, I was willing to buy far more than that at a higher price, so I’d go buy more shares on the open market, driving the price up.

This is complete bullshit, you can enter your entire demand curve into the market with various bids.

No, you’re wrong. You’re not taking a bidders budget into account. If I enter 20 points on my demand curve ans they’re all above the clearing price, I’ll end up being forced to buy the quantities of all my bids. That may totally bust my budget. There are no stop limit orders in these auctions...there’s only a buy order with a quantity and a price.

If you are willing to by 100 shares at $100 or, say, 200 shares at $50 you can enter the following two bids:

100 shares at $100

100 shares at $50

This will satisfy your demand curve.

In a direct listing, the initially listed shares will all transact at the same price (the clearing price).

That’s a contrived example though. Say you put 200 shares at $50. If the clearing price is $50, you’ve won 300 shares at $50 - $15,000 total. What if you only have $10,000? I’m saying it’s difficult to a) allow bidders to enter a demand curve b) respect their budget limitations c) keep it easily understandable for bidders.

Why would you put 200 shares at $50 and 100 shares at $100 if you only had a $10,000 budget? That's misrepresenting your actual demand curve.

Are you saying that an auction of this kind is a bit complicated, and it's possible to make a mistake? I suppose that might be true, but that is a very different assertion from your original position:

"since people had to enter a single point on their demand curve as a price and quantity of shares (instead of their entire demand curve)"

You can issue your whole curve as orders, can't you? Something like: buy 50 shares limit $200 on open, buy 50 shares limit $100 on open, buy 100 shares limit $50 on open.

There’s only buy orders in these auctions: buy X shares at Y price.

The limit is the price. With the "at open" I was thinking about direct listings where you'd need some way to prevent your order being filled after the opening auction (and potentially at a different price), but with an IPO that's not an issue at all. So you should definitely be able to just put your whole curve in.

But the point is that everyone with a bid >=$50 got filled.

If I am willing to buy 100 shares at $100, I may be willing to buy 300 shares at $60. So just because my bid got filled doesn't mean I won't be buying more.

If you're willing to buy 300 shares at 60, but only 100 shares at $100 you can enter two bids:

100 shares at $100

200 shares at $60

This will satisfy your demand position.

If the person has only 18000 though (300 at 60) then if they put in 100 at $100, they'll only be able to buy 133 at 60.

I would still enter two bids; it's just a matter of adjusting how many at each level.

No, this is not how it works.

All the shares in the auction are sold at the same price. If the market clears at 60, a person entering the bids I described would buy 300 shares at 60.

I apologize if I misunderstood. Isn't this a direct listing? At what point do retail investors get to participate in an auction?

Retail investors (and any other investors) submit orders before the new security begins to trade. The first thing that happens on open is an auction.

thanks. concise.

Institutional investors still win the day here, because Coinbase opened a private secondary market for them this week to buy shares ahead of the IPO.

Yeah, good catch

https://decrypt.co/55136/coinbase-to-launch-secondary-market...

After a new listing, retail can buy at the same instant as institutions, as long as the retail broker allows it, and many do.

Well not necessarily... didn't google use a dutch auction 15 years ago?

No, a Dutch auction a single product with the price ticking down. They used an OpenIPO auction format.

Do you see anything wrong with that?

Better question: Do you see anything right with that?

I know that he was being sarcastic... hopefully that will mess up with the AI wannabes...

I’m not sure there are big pops on OTC listings, as the pop on an institutional listing is the difference between what they sold shares at to raise money the previous night and what the market values them at in real life.

Since you’re not raising money in an OTC listing, trading should begin roughly at market price, no?

I could be wrong I don’t really play IPOs. Well, SPACs, haha.

If a SPAC is floated to do this retail investors might still have a chance

The SPAC would have to convince Coinbase that it's in their interests to go public via reverse merger rather than direct listing. This seems pretty unlikely, given that they've already filed their S-1, announced the direct listing, and presumably have done all the paperwork related to being a public company.

There's a bit of an adverse-selection problem with SPACs: not only do they need to find an undervalued asset that the public markets will value for more than the acquisition price, they need to convince that asset that the SPAC adds value and can take them public easier than doing the process themselves would. Big tech companies like Coinbase, AirBnB, and Roblox have plenty of money to hire the lawyers, accountants, and investment bankers that going public themselves requires.

Either pre-IPO trading or wait until the dust settles and then decide whether to buy or not.

You can trade Coinbase shared pre-IPO on FTX (unfortunately, not available to US users). The stock trading infra seems weird but makes sense under the hood and is reliable (happy to answer any questions people have).

https://ftx.com/trade/CBSE/USD

(this was mostly informational, but if anyone actually decides to use the platform and wants to get 5% off trading fees, also happy to share a referral link)

Do you work for FTX? If so, best way to contact you?