IPO

[thechoson]

My friend's company is planning on going public soon, and she has the option of buying some shares at a low price. Would this be a good buy?

[laurence]

LOL! Throw us a bone! What type of company? What industry? How large is it now? What price can she buy at? What price will shares be at opening of IPO? Is there any buzz about the company? How quickly can she sell shares once it's gone public?

[thechoson]

Would giving out any of that info be in violation of some kind of SEC code? Don't want to end up like Martha Stewart.

IT is not a big company at all. Internet company. No buzz, i am positive you've never heard of them. I think she can sell after 30 days.

[Nords]

If you want advice, then send us a link to the prospectus or the SEC filing or give us the name of the company. Cheap IPO shares aren't necessarily worth what you paid for them, let alone more.

Linking the prospectus or providing the filing/company info is not illegal for anyone. Your friend could be required to say nothing in public forums (fora?) during the IPO quiet period, but there's nothing wrong with you spreading the buzz. Just try to keep it away from Dan Quattrone, Jim Cramer, Mary Meeker, & Henry Blodgett.

[thechoson]

www.legalzoom.com

that's the company

thanks!

[azanon]

My opinion is that its too risky, unless she's not talking about a big chuck of her money. The reason is simply because if they go out of business, she'd lose both her job and her investment. Doing so is basically putting all your eggs in one basket.

[Nords]

OK, so it's been around for four years. And anything founded with Robert Shapiro can't be all bad, right?

But I don't see any IPO filings at EDGAR. I'm hoping that someone will correct me with a link to Legalzoom's IPO prospectus, but I can't detect any signs that they've started the IPO process.

Interesting side comment-- Legalzoom has so much website advertising that a Google search for "Legalzoom IPO" turns up 400 hits-- not a single one of which has anything to do with a Legalzoom IPO. And searching Google News turns up zero hits, which makes me think that they haven't started the filings yet.

So the answer to your question is "I don't know". But I'd be happy to look at a prospectus when the company coughs one up.

[lazyday]

Maybe it's not a (initial) public offering, but a private placement?

Years back, I once read that private placements on average had much better returns than the stock market. But much higher risk.

And, just because it used to be true, doesn't mean it is today... maybe people have become so excited about placements&offerings, that the terms aren't as good as they used to be.

I wouldn't buy into one unless I had a very good understanding of the company's accounting, and could convince myself that my price is cheap.

I was once offered a private placement (friend of a friend) but didn't bite, since the company had no profits, and I couldn't figure a value. It eventually had an IPO, and I would have made out nicely. Oh well.