Shanda (GAME) IPO
Yup - I got burned - big-time like a bunch of others.
Who's fault? Mine. Reason? Broke one of my Cardinal Rules For Trading, wasn't positioned to be able to pull out that same day if I had to. Ouch. Also being another down day on the market didn't help matters much either.
I think what did this IPO in was the fact that they decided at the last minute to dilute the shares being initially offered by increasing another 32% or so to be available. Had they dropped the price to their low range of $10.50 it might have helped offset the additional shares offered - but either way it's done now and they (and me) blew it. Too bad because the company itself is well inside the 'black' if you look at the numbers and where they are projected to be. I don't feel the slide was related to the company itself - it was the way they offered it. The market wouldn't support it.
Sooo...any comments on where it's headed now? Or not? Anybody seeing plummeting further down or will it hold it's own where it currently is. I don't give any hopes of getting back up to it's original price of $12.50 - not any time soon if it's considered now to be over-valued.
Oh well, another lesson learned once again - guess I'll get ready to put my stop order at it's closing price for Friday Monday morning at the open before it slides down into the $9. to low $10. range!
Also...there are rumors...but why the delay in it's offering to the public after the opening bell sounded on Friday? Do all IPO's delay their start like this?
I read in IBD it's related company dropped, but I also know that one of the guys I follow put a buy on it. Since it's new, you have a chance to recover, these IPOs are all over the place in the beginning, but it's usually better to wait a bit and see it form some form of pattern, then get in after its first breakout.
Agreed. Lesson learned...the hard way!
My take is to see how it consolidates, or if you want to get out, just start adjusting some stops below minor lows, you don't have to cash it all out, but if you are thinking it'll tank, then take out your cash in chunks. The dilution is likely done right, so you aren't too far off your mark. Just don't take a huge loss.
I was watching this stock, but I'm at my allowed limit for positions money management wise, but this was a recent IPO, that broke out. I marked the consolidation zones.
Also, FWIW, and with the usual disclaimer that hindsight is 20/20 with TA... a beta-adjusted, minor low stop strategy would have made an ok swing trade out of this one. I do this startegy from time to time, and I have been stopped out prematurely, but later read/found that you'll have better success at not placing the stop at your broker, but have the levels ready, and do them manually if the stock looks like it will close below low your stop, ie. ignore the intraday passing of the stop level, just stop yourself out manually at the end of the day if it looks like you'll get a close below your stop level. Here's an example of the play.
Just thought I'd throw that in there, not sure what your trading style is...
Actually, so it doesn't look like I'm too full of crap, I took that approach with PACR - in the end, I can see this stock going much higher, but not risking it. You can see though, that I didn't follow the plan to the T, I looked for a reversal at the first resistance level and exited my first buy. I had placed a second buy, likely not the smartest, but rather average up, not down, and the shape of the curve was indicative of a move to the orange resistance line, and price had held above one of the fibs. For the second buy I believed that the double fibs provided some support, looking for a second run to the $5.25 mark.
It's held so far, but now my money has been tied up for 1 month, and while the support held, the new breakout point - if there would be an upside, would be at about $3.75 anyway. So I could have easily gotten back in.
I have an indecision candle here on friday, so if it pierces the stop, I'm out. If it rises close to $3.75 and the market is down, I may stop myself out. If the market rallies, I'll be adjusting the stop up a little... as if it doesn't break out, then there's no point in me holding it.
Like I said, you'll get stopped out frequently, but you'll have money to trade something else, I had done this with SQNM too.. got stopped out on a huge dump, but luckily, had a gain going into the massive dump, and had played the stops this way, so I lost the gain, but the loss was really minor. The dump was in the order of 44%, lol.
Win some/lose some... but always trying to get more winners.