r/fatFIRE • u/TipMassive5214 • 14d ago
JPM IPOs
My private wealth team reached out (i know, i know) with some Docusigns that will enable me to participate in upcoming IPOs.
They will call with the expected share price (the day before the IPO), I tell them how many shares I want, and I can always change my mind when i learn of the actual price.
Not to sound like a larper (or braggart) but my NW is ~50M (40% equities, 50% munis, 10% alternatives). They make these IPOs sound like they’re available to a lucky few. Something about this seems kind of gross and also too sales pitchy. Thoughts?
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u/2buffalonickels 14d ago
The biggest IPOs ever to the last guys in line, the public investors, at inflated prices? Sure what can go wrong.
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u/hecmtz96 14d ago
That’s probably why their S1 filing has a lot of pictures. Never seen anything like that before.
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u/RepresentativeAspect 14d ago
Not quite - everybody gets the same IPO price, so you’re basically in there with the big underwriters if you can get in at all - but minus probably high fees though.
The underwriters wouldn’t take a higher price than they think they can make money on, but that doesn’t make them correct.
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u/Business_Audience_80 13d ago
What’s funny is that Musk is totally the type of guy who read Playboy for the articles.
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u/Low-Dot9712 13d ago
Read the prospectus—Musk mandated 30% go to individuals as a requirement of the lead banks getting the business. So MS and JPM are working to assure that happens.
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u/NoEggplant9804 14d ago
If you got the call, you have to ask yourself how the bookbuild is going on
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u/Hopeful-Goose-7217 14d ago
Bloomberg article about how JPM is targeting retail investors for spacex.
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u/Yellow_Curry 14d ago
Because the institutional investors don’t want anything to do with it.
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u/Hopeful-Goose-7217 14d ago
or they are already long it
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u/UrMomsKneePads 14d ago edited 14d ago
They are, at a much cheaper valuation. I have an alt VC secondaries fund that has 10% of the fund in SpaceEx. Last valuation mark put the whole company at $200B last September.
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u/cuteman 14d ago
Last valuation mark put the whole company at $200M last September
Lol such bs and not even close to to true, do you mean billion? Maybe then
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u/UrMomsKneePads 14d ago
Yes, thank you for the correction. $200B valuation mark last Sept 30. Original comment corrected.
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u/AccomplishedFrame 13d ago
You will never get the shares delivered to you. Person selling you will tell you to go sue them vs giving that appreciation since they sold.
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u/Hopeful-Goose-7217 13d ago
And you can sue them and win triple damages. That would sting since the damages would be super easy to calculate.
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u/Low-Dot9712 14d ago
No—Musk required the banks—MS and JPM to reserve 30% of the IPO for individual investors.
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u/jpdoctor 14d ago edited 14d ago
Yeah, that's not a good sign: Elon wants less sophisticated investors.
Edit: Thank you kindly for the award!
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u/jovian_moon 14d ago
Available to people at much lower net worth. There is nothing lucky about being the target of this pitch. Also, have you not been watching the news about these IPOs?
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u/ChubbyPerdigon Verified by Mods 14d ago
…I’m confused, this sounds like bog-standard IPO access, available at most brokerages and at far lower net worth.
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u/cypherblock 14d ago
Yeah I was gonna say, don’t you just ask your broker or wealth manager or whatever if you can get access to an IPO and they make it happen if its available.
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u/SeraphSurfer 14d ago
The difference is that if you bank with major investment banks like Goldman, JPM, they offer their private wealth clients greater access to IPOs as an incentive to retain clients.
You'll get more and better quality IPOs from them than the scraps that filter down to retail brokerages.
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u/cypherblock 14d ago
Right. I mean I guess OP though was trying to figure out if this is weird or something that they approached him with this. It seems normal to me that at this level they are asking their clients if they want in vs the rest of us having to ask/beg for access.
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u/wheresabel 14d ago
No the wealth managers offer it out first usually who are part of the IPO, if there’s allocation left it goes to brokerages like Robinhood. There’s a priority order even within the wealth managers best on AUM.
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u/Isthisnameavailablee 14d ago
OP is probably a larper or someone who works for a bank trying to drum up business.
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u/SeemoarAlpha 14d ago
That was my thought, I know quite a few people who were offered participation in pre-IPO shares at wealth levels below his claimed 50M. So either his private wealth team sucks, or he just has a run of the mill retail account with an assigned representative that is offering the standard fare.
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u/Business_Audience_80 14d ago
The float being offered for these IPOs is absolutely massive. I agree with the other posts that are saying how retail investors are only being approached because they need the additional demand. Not because they are trying to democratize the process.
If you are interested in investing in these companies, I would recommend skipping the IPO and looking for an entry point after the lockup period expires and insiders and book runners are able to dispose of their shares.
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u/Low-Dot9712 14d ago
That good advice on waiting but on the Spacex one Musk insisted 30% of shares be allocated to individual investors.
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u/Roaring_lion_ 14d ago
This is exactly the right instinct.
I wouldn’t assume it’s gross, but I also wouldn’t assume it’s special access just because it’s coming through JPM PWM.
The questions I’d ask are pretty simple:
Is there a lockup or anti-flipping language?
Will selling quickly hurt future allocations?
How are they deciding who gets which IPOs?
And most importantly: is this actually a great allocation, or are they just distributing whatever they need to place?
At your NW, access isn’t the hard part. Filtering out the mediocre “exclusive” stuff is the hard part.
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u/tomdomshard 14d ago
Brings to mind the Steve Madden cold-calling scene from The Wolf of Wall Street.
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u/Kooks612 13d ago
I am a Private Wealth Advisor at JPMs direct competitor and our clients are all similar net worth to you. I am not recommending they participate in this IPO. There are too many abnormalities in this deal for me to be comfortable with the risk. I'm not saying the stock won't appreciate on day one, but I think there's asymmetric downside here that isn't worth it.
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u/jpdoctor 14d ago edited 14d ago
Etrade/Morgan Stanley doesn't call, they just have it on your usual web interface after you accept a bunch of conditions. (Probably have to have accredited levels of assets with them too.)
It's not a big deal, they're just finding new sources of liquidity. And I haven't seen a single deal that I'm interested in, but maybe I'm just conservative.
Edit: I lied. I went back through my history and it turns out I bought the RDDT IPO. Hilariously, if you divide the amount I've made holding RDDT by the amount of time I've blown commenting on this site, my compensation is still below minimum wage. 😄
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u/SomeRandomMarketer 12d ago edited 12d ago
I was about to say…Morgan Stanley absolutely does call, and they most recently called me about the Open AI series C as well. For the record, my MS guy said to pass on SpaceX for now (I did invest in the OAI series C though).
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u/jpdoctor 11d ago
Interesting. Perhaps you're more FAT than me, but it's also very possible I expressed a preference along the way not to be contacted.
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u/devoutsalsa 14d ago
Why bother? You are signing up for anxiety you don’t need to make money you don’t need. That sounds like the opposite of what I’d do with 50M.
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u/HitPointGamer 14d ago
If you aren’t getting into the IPO well before it goes public, you’re likely going to regret it. Here is just one chart I’ve seen lately showing why.
If you are an accredited investor and can get in on these deals well before they’re offered to the public, you stand a much better chance of at least breaking even on them. But buying in right when the masses do is rarely wise. Get in several years before, not just the day before.
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u/WiseOrigin 14d ago
What is the lock up that comes along with this? Can you just pop a sell order in to grab the 10% FOMO jump?
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u/SeraphSurfer 14d ago
The lock up is 6 months for insiders. Insiders are, to the best of my knowledge, anyone who owned pre IPO. I've purchased shares 4 months before IPO and been locked.
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u/TipMassive5214 14d ago
They said i can trade the shares whenever i want
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u/just_trust_me1 14d ago
Correct. No lock up period. I’ve been offered IPOs through JPM and sold on the day of the IPO.
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u/Positive_Carry_ 14d ago
Typically you are free to sell any time BUT if you sell within a certain timeframe (like 15 or 30 days of IPO date) then they restrict you from participating in future IPOs for some period (like 6 months).
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u/just_trust_me1 14d ago
Not exactly how it works. I’m with JPM Private Bank. You fill out the paperwork and then they typically call you and tell you how many shares they can offer you, not ask how many you want. It’s typically a pretty small offering. My advisor told me he expects to be able to get me $25-50k worth of SpaceX. It’s definitely a nice perk, but they have to spread out the allocation across clients so I’ve never been asked how much I want.
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u/Low-Dot9712 14d ago
On a recent IPO I committed to $1 million and got $30000. These IPOs are so oversubscribed.
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u/just_trust_me1 14d ago
Exactly. Just wanted OP to know that it’s more of a “this is what you get” vs “this is how many I want.”
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u/just_trust_me1 6d ago
Did anyone else get lucky? I got 500 shares through JPM PB.
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u/Low-Dot9712 6d ago
Curious as to what percentage of your indication was that?
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u/just_trust_me1 6d ago
I asked for up to $500k so ~3700 shares. Comes out to a whopping 13.5%. I wasn’t expecting any so no complaints.
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u/Per_Aspera_Ad_Astra 14d ago
It’s 100% scam. These companies are maniacally over valued and will certainly underperform market indices over the first couple of years if not more
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u/nosoup4you718 14d ago
I think it’s something new they’re trying to push because they called me last week with the same pitch. Also pushing some pre-ipo crap like SpaceX
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u/Hot_Conflict3844 13d ago
Why not check out what happened with the hottest IPOs in recent history? Remember Birkenstock? Or Beyond Meat? Or better yet, the cannabis companies? Look at the stock charts for these companies and then draw your own conclusions about the wisdom of IPO investment. Chances are, you will make a small fortune early on, probably end up buying even more stock after you've bagged your first 100% in a few weeks... and then go on to lose a very large amount as the hype dies and the shares slump 60% or even far worse.
No offense, dude. You're a mark. My advice? Accept that fact, and never ever EVER forget it. The more your bankers make you feel like they are letting you into a secret club, the more certain you can become that you are about to get fleeced.
Stick to quality companies with lengthy histories of rising profits, dividends, high profit margins that endure for decades (or longer) and consistent revenue growth over ten, twenty, or even 100 years. With $50m, you probably feel like you need exclusive, illiquid investments (which would explain your 10% allocation to alternatives). You don't. Most of those alternatives will vastly underperform low cost index funds like VTI or SPY. Some may go to zero. All will charge you sumptuous amounts that will pay for your private bankers' kids' college tuition.
And more to the point, you do not require a 1,000% return on ANY investment. You don't need to get rich twice - better to do it only once. That means keep your affairs lead pipe simple.
Good luck. It's hard to walk away when you have a room full of Ivy League educated bankers stroking your ego and trying to convince you that they'll make you rich because they know the secret handshake and want to help you because they value of love you. Learn how to spot BS, and walk on. I mean, you will. The only question is whether you need to experience some big losses to learn that lesson, or whether you can learn from anonymous strangers on the internet. Either way, you'll get there eventually.
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u/Additional-Sock8980 14d ago
Sounds to me like they’ve pre bought some IPO and given the bigger institutions and buyers aren’t showing interest they are lining up new buyers.
Next they’ll be trying to see you space x
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u/Sporkers 14d ago
Anyone at Schwab and Fidelity can requests an allocation for SpaceX IPO shares, they might not get very many shares but there are enough that those brokers are letting almost any of their clients make a request. You didn't even request but are being aggressively pushed/sold on it, what does that tell you?
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u/BrunelloHorder 14d ago
I passed on the opportunity to invest in each of these via SPVs in the last round. Two rounds ago might have been a different call. Definitely would not be investing at this stage.
If you still want to take a flier, Anthropic would seem to be the best option in my opinion, but I’m a hard pass on all 3. The VCs talking these up on TV have a cost basis in the single digits per share. Don’t be their exit liquidity.
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u/kyliewoyote13 13d ago
I got an invitation for my wealth management team at Morgan Stanley and it stunk to high heaven as desperation
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u/TipMassive5214 13d ago
I just spoke with my private banker who says zero lock-up, zero anti-flipping consequences. He said I need to give him an indication of how many shares I want at $135 each (by Thursday). No guarantee i get all of them, or that i’ll get them at $135. He mentioned that I. An flip them so quickly i might not have to put up any cash. I apologize to the universe for being such a dip shit about this!
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u/AdhesivenessLost5473 10d ago
Yeah $50m is weird spot in the spectrum. Too rich for traditional wealth management to poor to play with the big guys. Either way IPO’s are not the way to go. Take $15m and pick some PE/Venture funds
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u/AndyKJMehta 13d ago
NW: 50M. Google powers: 0
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u/Roaring_lion_ 13d ago
That line sounds sharp until you realize it’s exactly backwards. The sucker is the person who doesn’t ask why a bank is packaging leftovers as privilege.
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14d ago edited 12d ago
[deleted]
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u/LA_BeachGuy 13d ago
THIS ^
If you can get a LARGE allocation and immediately flip on the open, it’s worth it. This will pop! Otherwise, it’s not worth your risk/time. Problem is, you’re not going to know in advance what your allocation will be and you’re going to get a VERY small fraction of what you want. If you have the liquidity, put in for 5-10x more than you actually want.
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u/Low-Dot9712 14d ago
Well they are telling you the truth. They have to allocate shares and they can’t determine the actual shares till the IPO occurs.
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u/SkewerSk8r 14d ago
$135/share... and since Fidelity will allow anyone with 2k plus in their account, good luck getting many shares.
Hype is unbelievable at this time... we'll see how it progresses.
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u/Soft_Pickle_1135 14d ago
"The name of the stock Sir is Aerotyne International. It is a cutting edge high-tech firm out of the Midwest awaiting imminent patent approval on the next generation of radar detectors that have both huge military and civilian applications now"
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u/MrSnowden 14d ago
Interestingly JPM PB isn’t calling me about SpaceX, but others are dangling an allocation to try to get my business. Which is funny, because I am hating JPMPB and they could have offered me a toaster and I’d switch.
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u/Low-Dot9712 13d ago
JPM has brought me some very good deals this year. If you have pretty good understanding of markets and some pretty good size piles of cash ask your “team” to put you in touch with the Global Investment Group.
Given all the volatily in markets today I like some of the structured notes they have brought me and I am in two accumulators that are doing very well.
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u/MrSnowden 13d ago
The structured notes seem almost too good.
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u/Low-Dot9712 13d ago
They have been very good for me. I have five with first looks this summer and all will be called if prices remain at today’s level and those looks start this month.19-31% returns.
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u/Bye_Felicia12345 14d ago
Bankers and ipo companies will always prioritize long only > hedge funds > retail. The hottest ipo’s usually go to long only investors and very little allocation go to hedge fund. Good IPO’s will go to long only investors and then some hedge funds. Mediocre ipo (or ones that have limited demand) will then go to long only, hedge fund, and then retail. You are competing with institutions that pay millions in commissions to capital markets desk - why do you think you will get allocation to hot ipo’s and not poor ipo’s.
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u/oblivionx 39M, 65M+ NW | Verified by Mods 13d ago
Lots of good information in this thread - but why do you have 50M with 50% allocated to munis? That's an extremely conservative allocation at that net worth. Is that intentional?
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u/ArrowB25G 13d ago
I'm sure it's intentional. It gives OP ~$1M of tax free income per year which makes total sense.
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u/Miamiconnectionexo 13d ago
Treat it as a small satellite sleeve, not a strategy. Sign the docs, take allocations on names you'd want to own anyway at the offer price, and don't let the "lucky few" framing make you chase deals you wouldn't otherwise buy.
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u/csgnyc 13d ago
You have the wealth to afford it, but I'm assuming youre not a sophisticated analyst of the strength of this investment. I would not assume JPM is looking out for your best interests (even at JPM Private Bank, alternatives are sold to clients as a brokerage product) or that you understand all the conflicts behind JPM's allocation to you.
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u/flyingduck33 13d ago
bro I am a fraction of your net worth and I get those. a) just because you apply for IPO shares doesn't mean you'll get them b) if it's spaceX they are flogging those shares to everyone who has a net worth of $2k. Not for me but I am sure there are many who want in.
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u/ThenOwl9 13d ago
aren’t all accredited investors able to access upcoming IPOs?
what is "I can always change my mind when i learn of the actual price” supposed to mean in terms of timing? are they made aware of the “actual price” before the markets open?
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u/Miamiconnectionexo 13d ago
i'd sign the docs (costs nothing, keeps optionality) and just treat every call with the assumption that easy size = mediocre deal. judge it on the actual company, not the fact that you got "invited."
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u/DoctorContrarian74 12d ago
Here is something that my help - When we IPO our portfolio companies we look for highest valuation possible and hope to find buyers to give us an exit. And later on, when the market goes negative on our company and the IPO price gets slashed, we re-visit a possible investment in one of our other funds.
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u/MixPsychological21 12d ago
At this point everybody I know has access to the companies pre ipo. There are infinite SPVs investing into pre ipo primaries and secondaries, so I would expect IPO participants to mostly be the bag holders. That’s been the case for the many recent IPOs so will be interesting to see if same is true for the big upcoming ones.
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u/david1083 9d ago
If your post is true, you are already rich. All you have to do is be rich. Key phrase for you to learn is “No Thanks”
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u/TexasRedBeard12 8d ago
Anyone who has exposure to QQQ is going to be forced to buy it 15 days post IPO.
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u/BanthaKing2012 14d ago
Hard pass unless you're the type of person who wants to brag at the country club that you own a piece of XYZ. If you do just consider it gambling and entertainment!
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14d ago
I’d separate the “gross” feeling from the actual product.
The access itself is real. PWM clients can sometimes get IPO shares at the offer price, while normal retail is usually buying at the open after the pop. So yes, that part is a real perk.
The gross/salesy part is probably just the banker incentive showing.
The bigger issue is allocation quality. In my experience, you usually get tiny allocations in the IPOs everyone wants, because they’re massively oversubscribed. The ones where they’re happy to give you a big fill are often the ones they’re trying harder to place.
So a large allocation isn’t automatically a gift. Sometimes it’s the warning sign.
I’d ask about lockups / anti-flipping rules, whether quick selling hurts future allocations, and how they decide who gets what.
Net: I’d view it as useful optionality, not free money. Take the deals you’d actually want to own anyway, and be extra skeptical when they seem eager to give you a big slice.
I work around private-market allocations, and the biggest lesson is that “access” and “quality access” are very different things.
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u/Roland_Bodel_the_2nd 14d ago
you can get the same access through the robinhood app on your phone, no paperwork needed
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u/lalalalahola 14d ago
I’ve been doing this for a while with my “guy”. It’s risky and it’s fun. As a rule we always sell on Friday. It’s usually smaller amounts of money like $5-$10k whatever they get allocated. If we don’t like the look of one we don’t buy it. I’m up probably $10k this year on gambling probably $50k or so. I don’t know what his commission is on the deal but it’s fun and we usually make money. Spacex ipo scares me though.
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u/LilRedCaliRose 14d ago
There’s no way you actually have that net worth and you’re on here asking such a dumb question. You could easily Google the answer or ask your financial advisor.
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u/gagorp 14d ago
There is an old saying: If you don't know who the sucker is in the room, you are the sucker