Market buzz versus the hard numbers - CMC Markets provides
an analysis
SINGAPORE, May 17, 2012 /PRNewswire-Asia/ -- Facebook is finally
going public on Friday 18 May (as widely expected), and retail
investors will at last be able to trade the company's shares.
However, we have yet to see if anyone will be able to make money
from the landmark IPO, or if it is purely a chance for the private
shareholders to cash in.
Having looked back at some of the highest profile IPOs of the last
decade, Colin Cieszynski, Senior Market Analyst at CMC Markets, sees definite opportunities to make
money - if traders know the rules and are prepared to trade on both
sides of the market.
Commenting on the findings of his analysis, Cieszynski
said, "Companies around the world go public all
the time, but only a few captures the imagination of the street,
the media and the general public. There are usually only so many
shares available for sale in an IPO and, if demand outstrips
supply, traders are ready and waiting to purchase shares when they
debut in the open market. This unfilled demand tends to drive the
initial trading spikes, but while this may be great for those lucky
enough to get IPO shares, the question remains as to whether there
will be any room for anyone else to make money."
To answer the question of whether the Facebook IPO will be a flash
in the pan or a real money maker, Colin examined post IPO trading
for eight major companies that debuted in the last decade, four
from the technology sector and four from other industries (see
figure1 below).
Key findings:
Cieszynski concluded, "Performance of previous high-profile
internet related IPOs suggests that we could see a major spike off
the open and perhaps even strength through the first day of
trading. We could then see a retreat through the rest of May and
most of June with the potential for an advance in late June or
early July as analysts are cleared to publish research and the
company's first earnings report approaches. This could also
coincide with traditional stock market seasonal trading
swings."
CMC Markets' customers will be able to trade on the price movement
of Facebook shares via their CFD accounts on Friday afternoon (18
May), directly after Facebook shares are expected to list on the
NASDAQ. Please note that trading
Facebook CFDs does not mean
that a trader acquires physical Facebook shares but instead gains
similar exposure to them.
Figure 1:
(Figure 1 image: http://www.cmcmarkets.com.sg/sites/public.sg/files/assets/img/figure_1.png)
Average Returns in the Days Following a High Profile IPO:
http://www.cmcmarkets.com.sg/sites/public.sg/files/assets/img/figure_2.png)
About CMC Markets
CMC Markets is a leading global provider of CFD and foreign
exchange (FX). Since Peter Cruddas founded CMC Markets in
1989, the company now services more than 80,000 clients worldwide,
who placed approximately 30 million trades last year.
With offices in London, Paris, Milan, Madrid, Vienna, Sydney,
Tokyo, Toronto, Beijing, Auckland, Oslo, Stockholm and Singapore,
CMC Markets represents clients in over 70 countries.
CMC Markets is authorised and regulated in Singapore by the
Monetary Authority of Singapore. For further information on CMC
Markets please visit www.cmcmarkets.com.sg
The material (whether or not it states any opinions) is for general
information purposes only, and does not take into account your
personal circumstances or objectives. Nothing in this material is
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