I put the call out on Twitter for other investors who tried (and failed or succeeded) to get shares, at the offer, for the TWTR IPO. While this hardly qualifies as scientific research, it accomplishes something.
First, it provides hope that anything's possible. Generally, to get shares from your broker, you need a track record. Part of the black box that is the IPO process is that nobody really knows what that means because the brokerages don't explicitly tell us. And, of course, the SEC doesn't require them to.
Is a track record merely a large dollar value account or is it number of holdings, trades, types of positions, risk aversion profile? It would be nice if the application for IPO shares looked more like the standard process brokerages use to qualify customers to trade options. That's much easier to make sense of as you answer the regulator-mandated questions and submit your form. There are various approval levels. You can move between them. You know where you stand and, relative to the IPO situation, a better idea of why.
Back in the day when I was vying for IPO shares (I'm not that old; I just can't own individual stocks anymore!), I routinely asked for shares and never received any. Those experiences mean I can empathize with this guy:
@Rocco_TheStreet last thing I wanna say. As a small investor who is learning my way as an AAPM, just felt duped. "Small"— jeremy rogers (@jjrog3) November 8, 2013At the same time, I'm not naive. I understand the notion of supply and demand as well as the need to exercise control over it. However, we require some balance between top down-supplied order in the IPO process and color on how many shares get placed here and there. Jack Dorsey probably deserves every dime he receives in this process (though that's certainly arguable), but does the father-in-law of a hot shot who works for an IPO underwriter "deserve" shares any more than you do? I reckon not. Frankly, I'd love to see a list, detailing who (by rank in society!) asked for shares and a list of who actually received them. And why. Speaking of transparency, the following series of trade confirmation screenshots and Tweets from some readers of TheStreet not only let you know you're not alone as a smallish individual investor, but hope does exist even in what can feel like a crooked racket.
@Rocco_TheStreet I asked Schwab for 200 shares of Twitter and got 100.— Loudoun (@rctmat) November 8, 2013
@Rocco_TheStreet Bid for 3,000 shared thru Fidelity. Got a big 0. No position now either.— Pete (@broncos1991) November 8, 2013Smart man (^^).
@TheStreet @jimcramer @Rocco_TheStreet I didn't get any shares through my broker, Fidelity :-(( I wish I had— Dragana Mendel (@DraganaMendel) November 8, 2013You might be better off. I could see this thing dropping below the original offer price! That confirmation comes from a friend of mine, known as @CraigScott31 on Twitter, who told me -- and, despite being a New York Islanders fan, I have no reason to not believe him -- he was told not to sell inside 90 days if he wanted to sniff even a part of the Alibaba IPO. He also reports that ahead of the Facebook IPO, he received a call from his broker saying, "Great news! You asked for 1,000 shares, well I got you 5,000 shares." At that point, Craig notes, "I knew I was (expletive)." Just like the 2013 version of the Islanders. There's no doubt, the deck's stacked against the individual investor. All you can do is fight the good fight and put your foot to the floor, darling, and don't look back. Follow @rocco_thestreet -- Written by Rocco Pendola in Santa Monica, Calif.