Find out what flippers are during the launch of IPOs, and see how quickly these investors profit from the transaction
In the financial world, there are many different strategies, investments and activities. One of the most "famous" strategies in this market is the work of flippers, who are investors who take part in IPOs (Initial Public Offerings).
IPOs are the process by which a private company offers its shares for the first time, allowing outside investors to buy a stake in the company.
To act as a flipper, you need a lot of knowledge and study. Because flippers aim to buy shares at a low price in the initial phase and sell them quickly after the initial appreciation in the secondary market. In other words, to be successful you need to be very attentive to market movements.
Firstly, we need to understand that in order to take part in an IPO, you need to have an account with a stockbroker, make a reservation request for the amount of money you would like to invest and how much you would pay for each share (investors are given an average amount that the company will be going public with per share).
After all this process, on the day stipulated by the commission, the value set per share and the number of shares that each individual investor will be able to buy will come out.
When a company goes public, all investors are enthusiastic about its proposals and prospects in the short, medium and long term. If it's a company with vision, in a promising market niche, with growing earnings and profitability and excellent management, the number of shares traded on the day of the Public Offering is very large and tends to generate a very high valuation on the same day.
Thus, investors who booked their shares before the IPOThey sell these shares on the same day for more than the amount previously reserved.
It's important to mention that because there are so many people interested in participating in the IPO, the company that is going public offers a limited number of shares to each interested party, so if you were interested in buying 10,000 reais worth of a particular share in the company, there will be a split and you will only be able to buy a fraction of that amount.
And that's exactly the main reason why IPOs have seen a surge in value right at the opening of the trading session: those who wanted to buy a larger amount before but couldn't, can now buy, but directly at the IPO. Stock exchange and this tends to make the value go up a lot at first, but it doesn't mean that it will go up forever, so it's very important to map out an optimal strategy so that you don't regret it later.
General concepts
IPOs
IPOs (Initial Public Offerings) are the process by which a private company offers its shares to the public for the first time, allowing outside investors to buy a stake in the company.
Flippers
Flippers are investors who take part in IPOs (Initial Public Offerings) with the aim of buying shares at a low price in the initial phase and selling them quickly after the initial valuation on the secondary market.
They seek to profit from the difference between the initial offer price and the market price after the IPO.
How do flippers work?
The participation of flippers can have an impact on the share price after the IPO in various ways:
Sales pressureIf a considerable number of flippers choose to sell their shares soon after the IPO, this can create selling pressure in the market, resulting in a temporary drop in share prices.
Increased volatilityThe presence of flippers can increase the volatility of shares, as they have the ability to buy and sell large volumes of shares quickly.
Indication of market sentimentFlippers' shares can be interpreted as an indicator of market sentiment towards the newly listed company. If many flippers are quickly disposing of their holdings, this could suggest concerns about the company's future.
Feedback for future IPOsThe behaviour of flippers can provide valuable insights for companies and investors into demand and the market's perception of IPOs. If many flippers are making profits quickly, this could indicate that the shares were undervalued during the initial offering.
To summarise, flippers play an important role in IPOsThis temporarily influences share prices and offers perspectives on demand and interest in the new bonds issued.
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