When should i sell my IPO? I bought some IPO and its value doubled in the first week.?

Question

Everybody i know tell me to hold on to them until the future; i believe that doubling up is more then enough of a profit; but people always talk about other IPOs from the past whose value today is is 50X its IPO value...

i guess what im saying is what are the odds of that? and is it really better to hold on or sell the IPO and reinvest

Answer 1

It depends on a number of things. Why did you buy it in the first place? If the reasons are still there it may be worth holding onto. Another consideration is taxes. If you sell now you'll pay taxes at your current marginal tax rate. 28%, 35% or higher. If you hold onto it for a year your rate will only be 15% (unless a Democrat gets elected). Also, what are you going to do with the money? Do you have a better investment in mind? No easy answer here.

Answer 2

You should formulate some long term strategy so you don't end up second guessing yourself..........take your profit while you can and if the stock fluctuates you can always go back and rebuy.........most stocks go up and down so if you are content with taking a profit, good, or sell some of it, enough to cover your initial price, then whatever you have left is "found money"

Answer 3

Easy... if you have 100% profit, SELL HALF! It's like having your cake and eating it too.

Answer 4

It may be a good idea to sell some of it to lock in some profit for sure.  You can then keep some shares and sell those doen the road.

Answer 5

There's no clear cut answer.  Some IPOs tank hard, some do great, and many just wander around their IPO price.  Basically it comes down to whether you think the company will continue to grow and make more and more money for the long term.  That is what the markets look for to determine the current price.  If you think it will grow profits a lot for a long time, you may want to hold on to it.  If you think it will just putter along or will slow down, you may want to sell it.  Or you could do a hybrid approach, and sell some of it now, and hold on to the rest.  Let's say you sell half of it now.  Since it has doubled, you just got all your original money back, and locked in 100% gains in half your money.  Now with the other half you can hold on to it as long as you want.  You end up with less gain if it does real well, but less loss if it does poorly.

Answer 6

Congratulations on your profit!

I am sure you had reasons for buying into that IPO in the first place. Does that reason still exist? If so, then it will be wise if you held on to that position.

A major pitfall for investors is to get greedy when things are going their way. You can't pick tops or bottoms in the market, but what gives you long term profits is being able to hold on to that major trend. http://lowriskforex.blogspot.com