One way to get ahead of the Groupon IPO is to buy some shares in GSV Capital (GSVC), an externally managed, non-diversified closed-end management investment company. This stock could be a great buying opportunity in front of the Groupon IPO, with shares off by 5% so far in 2011.
GSV Capital is the first publically traded security that enables investors to participate in the growth of the world's most exciting and growing companies -- before they go public. GSV's current investments include Facebook, GILT Groupe, Twitter, Bloomenergy and, of course, Groupon. Twitter is its largest holding, Facebook is its second-largest holding, and Groupon is its eighth-largest holding.GSV Capital could be a viewed as a lower-risk way to play the Groupon IPO since the company is so diversified in its investments, with multiple startups. That said, with Groupon being its eighth-largest holding, a strong IPO from the daily deals player could easily spark a big spike for GSV Capital. The way I would play GSV Capital ahead of the Groupon IPO would be to simply buy the stock if it breaks out above some overhead resistance at its 50-day moving average of $14.42 to $15 a share on solid volume. Look for any up-volume days that are tracking in close to or above the three-month average volume of 91,600 shares. If that breakout triggers and it comes with volume, I would target a run back toward $17 a share or possibly even higher. >>5 Stocks Setting Up to Break Out Keep a tight mental stop on this play since we are looking for just a quick trade if market players pile into this name ahead of the Groupon IPO. Another way to play GSV would be to buy it near some previous support at $13 to $12.72 a share with a mental stop just a few percentage points below those levels. This way you can buy on weakness and anticipate the breakout if it does trigger once Groupon goes public.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV