Friday, September 29, 2006

Bare Escentuals IPO

Great news! I was allocated shares of the Bare Escentuals IPO. Bare Escentuals (Nasdaq: BARE) priced on Thursday afternoon at $22 per share. Bare Escentuals, which is based in San Francisco, develops and markets mineral-based cosmetics. They were originally expected to sell 16 million IPO shares at between $15-17 per share.

The final share pricing of $22 per share indicates a high degree of demand for the underlying stock. I expect BARE to rise well above the $22 IPO price in early trading on Friday morning. Buying shares in an IPO such as this one is an almost certain guarantee of make money. Buying IPO stock is one of my investment strategies. I'll write more about the intricacies of subscribing to and getting an IPO share allocation in a later post.

pfstock

2 comments:

Smarty said...

Congrats on getting your shares. They're over $29 now at the open market. Please explain more on the IPO process. Also send me your personal email.

pfstock said...

Thanks. My IPO stock, Bare Escentuals (Nasdaq: BARE), is up again today. My Email address is shown in the right column of my blog, under "About Me".

Once you pass the IPO eligibility questionaire, the next stage is to wait until the broker announces that they are taking conditional offers on a new IPO. At that time, you should go to the broker website, read (or at least skim) through the prospectus, and place a conditional offer.

Next comes the pricing (if the IPO is not withdrawn). You will be asked to confirm your conditional offer. This is very important. You have to make the decision at this point if the IPO is one that you want to participate in. Warning: not all IPOs go up, so choose carefully!

The last stage is the allocation phase. Here you will be randomly allocated shares based on the level of interest in the IPO. However, I estimate that 80-90% of the time, I was not allocated any shares after completing this whole procedure.

Buying an IPO is a big hassle, and you most likely won't even get any IPO shares in the end. But if you play the IPO game right and jump through all their hoops, you can end up with an almost certain profit. It is like getting free money.