VMWare IPO: Misinformation Just Like the Old Days
VMWare’s Stock Rises 76% in IPO. The headlines say it, the anchors on CNBC repeated it a hundred times, and if you’re young or new to trading, you may be misled by it.
The implication is that you could have bought VMWare this morning and sold it this evening for 76% more. That would be, as we say down here, a damned lie.
VMWare opened at 52.00 per share. That’s about where your market order would have been filled (although there were quite a few prints up around 55.00 as well). VMWare closed at 51.00. You would have lost 2% of your money, and you would have been lucky. Back in the 90s, you would have lost much, much more on virtually any IPO. A good friend of mine lost a ton of money with a market order to buy an IPO at the open- the IPO of a little company called Yahoo!
The IPO of VMWare was “priced at 29.00″; the only people who could get it at that price (or lower) were the insiders, who got their shares before it was unloaded on offered to the public.
Pay no attention to the headlines or the cute anchor chicks getting all excited about them. Look at where you could have bought that IPO, and where you could have sold.
And stay away from these things.