One of the most unusual, but at the same time more frequent, ways to enter equities is through the IPOs of new companies. This year, this scenario is developing more regularly as a consequence of the better behavior of national equities. Several companies have already chosen this format to define their business model. But what it is about is to elucidate if it is favorable for your interests to use this strategy to make the savings profitable from now on.
As in all areas of life there are cases for everyone. With a scenario where the operations have been very profitable and you have been able to obtain wide benefits to your open positions. But neither can you forget that in other situations they have been ruinous operations in which you have lost a lot of money. Even more than your household finances could bear. For this same reason, you will have no choice but to analyze each of the stock exchanges. Because in effect, they are different and the reasons may even be different.
Of course, a priori, it constitutes a real opportunity to do business in the always complicated world of money. But you have to see and analyze the expectations of your line of business. Because in any case, you can't sign them happily or out of obligation, because you may have more than one negative surprise in a few days. Not surprisingly, it is one of the risks to which you will be exposed with the IPOs. In a way, it is a Russian roulette that you will not know what the result will be for your personal interests. You must bear in mind that everything can happen, from being a positive operation to the opposite.
Companies: new IPOs
This subject is especially relevant because with the arrival of spring, several companies are in a position to take this step. Specifically, the latter is the manufacturer of automotive components Gestamp that it has revised downward the upper part of the guideline price band for its IPO. To do this, he has set a new fork between 5,6 and 5,9 euros per share. The company could expand the percentage placed on the stock market. For a percentage of up to 31,0% in the event that the "green shoe" is finally executed (the purchase option granted to underwriters).
In any case, it is another alternative available to small and medium investors to make their operations profitable in national equities. Just like some more than others will appear until the end of the new exercise. With the doubt, many times, of not knowing which of the IPOs to lean towards. It is one of the great disadvantages of accepting this unique hiring system. Or perhaps it is more profitable to go to the traditional purchase of shares in the financial markets?
Advantages of going to these operations
Stock IPOs generate real business opportunities. There is no doubt about this, as can be seen in recent years. The main problem focuses on detect which are the most profitable IPOs. To differentiate them from those that are not. There are many euros at stake and therefore it is not advisable to undervalue this important aspect of these operations. Because in effect, the result of your actions may be very different and it is worth taking this relevant aspect into consideration.
One of its main benefits is that you can obtain very high capital gains. Perhaps above that generated by the classic hiring system. That is, through the direct purchase of shares in the financial markets. Because in recent cases it has been possible to obtain returns above 20%, even higher in the most profitable that there has been in the Spanish stock market. In any case, it is not an operation for speculative movements in any of the cases. It is necessary to have a medium and long term of permanence to generate the best reward.
In addition, by not having any defined trend, you will not have to analyze the stocks from the point of view of technical analysis. And this fact will make it easier for you to enter the financial markets. With you give the order to your bank will be enough. You will only have to wait as it is its debut in equities. Although there are some clues that they will give you about how it will evolve in the financial markets. Mainly originated from the analysts of the financial markets.
Some of its drawbacks
Nor should you set aside the risks that this kind of special operations entails. Because you must bear in mind that they start from scratch on the stock market. You can mark any course from the beginning of your quotes. Where it is far from ruled out that they could lose a very important part of their market value. One of the most clarifying examples is what happened to shareholders with the exit of Bankia.
This bank is a clear example that you can lose a lot of money with an IPO. Although it is a very atypical case due to the peculiar ways in which the entity began to trade on the Madrid stock market. But where small investors left many euros along the way. Until lose a very important part of its value. It is a story that you will know quite well because it has been reflected in the media. Where you should avoid reaching these unpleasant situations that can change the status of your savings account.
If not so serious, there are other cases in which the IPO of companies has not been as expected by retail investors. There are quite a few cases that prove this unwanted scenario. Because in effect, you are exposed to many risks. More than you think from the beginning. Where it will be a long time until the end you can recover your financial contributions. Once it recovers the original prices since its exit to the equity markets. It is one of the problems that you must face if you opt for this model in investment.
Differences with other models
In any case, it presents some sensible differences with respect to other more conventional ways to make profitable your savings. Because to start you don't have any reference in the prices that mark their actions. It starts for the first time and this is always more complicated. It is much more difficult to develop a successful investment strategy than in the other cases. It can even cost you more to set goals and even a target price in the share price. From this scenario, operations in the equity markets are more complicated.
As a consequence of these actions, it will cost you much more to plan your next movements in the financial markets. To the point that you will not know what you have to do. Whether to sell, whether to exit the markets or even make new purchases in the security that presents these characteristics. It is not surprising, therefore, that it is a more conservative investor profile the one who opts for this kind of operations. Trying by all means to create a stable savings bag for the next few years. That in the case of older retailers they can use to supplement their pension.
Another of the differences that characterize stock exchanges is that the information you have is very scarce. This does not allow you to carry out a detailed analysis of the operation. It is very common, unfortunately, that some investors formalize this kind of operations from the most absolute of ignorance. This is one of the scenarios that you should avoid at all costs to prevent you from having more than negative surprises during your equity listing.
It does not generate commissions or other expenses
The IPOs of the new listed companies will not suppose you an additional financial effort. You will not have to assume greater expenses than those derived from the purchase of shares. Although having a very wide price range at the exit can lead you to what is called carrying out a lousy financial operation. You should especially take care of the price at which you want to acquire the financial asset. It can be decisive so that you can make the operation profitable, even in a much shorter period of time.
On the other hand, the choice of which index will improve the prospects for improving the state of our current account will be determined by the situation at all times. It won't always be the same, but depending on the profile you present It will be adapted to your preferences. It is true that opting for the Eurostoxx can be an open door to innovation within the world of money. As long as it is included in a correctly planned strategy from the beginning.
Therefore, it will become a useful instrument not only to make your capital profitable, but also to protect yourself from the most adverse scenarios for financial markets. To the point of becoming one of the most effective keys that you have at hand to defend your interests as a saver.
Sometimes if companies go public is beneficial. For example 5 years ago Facebook was listed on the stock market and now its shares are worth a lot of money. Another one that trades well are those of Apple ... so we have many examples.
In my opinion, large technology companies are ideal.