Did you know that it is possible to make easy money through trading in IPOs? You don’t even need to be a seasoned investor. All you need to do is perform some simple steps and watch your investment grow. Here are the reasons why you should invest in IPOs:
The best thing about buying into an IPO offering is that all you have to do is wait for the successful completion of the issuance and listing process and then monitor any developments around the company or industry-wise events before selling off your shares.
The investing success stories that you hear on the news aren’t all about people who ploughed their savings and investments in company stocks and bonds and lived to tell the tale of how they amass millions over some time. No, most of them made fortunes through IPO investing because they could buy at a low price and sell it off after the initial surge of demand at a higher price, pocketing the difference as pure profit.
You may think that by buying into an upcoming listing on the stock exchange, you’re exposed to a higher level of risk because you buy shares at a lower price. But actually, it’s the exact opposite! Why? When you invest in an IPO offering, the entire company has yet to be priced and valued by the market.
So what is HK’s hottest IPO?
We reveal HK’s hottest IPO and six things you never knew about them.
- The company is Zopo, a mobile phone manufacturer.
- This year it has experienced the highest increase in sales since its inception in 2012, rising by 400%.
- The reason for this surge is that they have moved into the Indian market with low-priced smartphones which are specifically designed for use on India’s 3G network and therefore offer lower cost-per-megabyte than other networks, such as China Mobile, where iPhones fall flat due to their high data costs of $8 per megabyte (current price on Amazon). Xiaomi encountered similar issues when they first entered India but succeeded after partnering with Airtel and providing free data for six months. Zopo appears to be following the same path but using Airtel with their new 4G phone, which provides data at $1 per megabyte (current price on Amazon).
- This is an issue of high interest in India, where most cellular users are not yet 3G customers and cannot afford the higher-priced smartphones like iPhones. Lower-priced products result in lower profit margins but significantly higher sales numbers. Apple has held out in the hope that they can make up profits through future wireless carrier deals, similar to what they achieved with China Mobile’s 700 million subscribers; however, this has not panned out so far because British Telecom broke off talks after Apple demanded a 30% discount on all iPhone phones sold through their 3G network.
- Zopo is currently listed as the fifth-largest phone manufacturer in China, and it’s the first time that a Chinese phone company has achieved such a high ranking
- As Hong Kong is experiencing a stock market bubble, more and more companies are looking to acquire new listings on HK, regardless of industry or product type. Many of these companies list themselves on HK simply for publicity and then delist after three to four months; however, this is not the case with Zopo, whose share value has remained stable since its initial offering in December 2013 at $0.12 per share (current price on Amazon).
Unlike purchasing stocks and bonds from established companies and waiting for months before anyone even notices them and starts trading them on the exchanges, investing in an IPO is usually accompanied by some good marketing buzz, so people start buying into it very quickly, causing its value to shoot up immediately. So within a matter of days, you could make a profit from your initial investment. New traders who want to trade in IPOs should use an experienced online broker from Saxo Bank to help them get started.