Participating in U.S. stock IPOs refers to the process where investors engage in the initial public offering (IPO) of newly listed companies in the U.S. stock market. For investors, this presents a significant opportunity to gain profits. How to start participating in IPOs and what matters to pay attention to are questions that investors are highly concerned about. This article aims to address your concerns.

Key Points to Note for Participating in U.S. Stock IPOs

• Trading Hours: Trading occurs from 9:30 to 16:00 Eastern Standard Time (EST) Monday through Friday, corresponding to 21:30 to 4:00 Beijing Time (during daylight saving time) or 22:30 to 5:00 (during standard time).
• Allotment Principle: U.S. stock IPOs follow the principles of inclusivity and weighted allotment. This means that while efforts are made to accommodate individual investors, those subscribing to more shares are more likely to be allotted.
• Allotment Results Announcement: Generally announced either before the new stock's listing or on the previous trading day.
• Possible Costs: Costs may include losses due to price declines, foreign exchange losses, and commission losses upon selling.
• Fund Freeze: Participating in U.S. stock IPOs requires freezing funds, similar to IPOs in the Hong Kong stock market, but without the need for holding market value.
• Investors should be cautious about the probability of price declines when participating in U.S. stock IPOs.

Characteristics of Participating in U.S. Stock IPOs

1. Rapid Listing Process: Compared to Hong Kong and A-share markets, the IPO subscription period in the U.S. stock market is significantly shorter, typically lasting only 3 to 5 working days. Once the subscription period ends, the company quickly goes public, reducing the time funds are tied up and thus improving fund turnover efficiency.
2. Allocation Mechanism: In the United States, the allocation of new stocks is usually determined jointly by underwriters and issuing companies. Ordinary investors rarely have direct opportunities to participate in the public subscription of new stocks. IPOs typically use an allocation system mainly targeting large investment institutions and funds. If a brokerage firm can provide IPO subscription services, it usually means they have participated in the allocation and obtained a certain quota of new stocks. Then, based on certain rules, brokerage firms allocate these quotas to ordinary investors on their platforms. The specific allocation rules may vary by brokerage firm, but many brokerage firms use inclusive principles and weighted subscription quantities during promotion periods to provide a fairer subscription experience.
3. Uncertain Allotment and Trading Time: In the United States, the allotment results and trading time for new stocks are not fixed, typically announced between 21:00 and 23:00 on the listing day. However, the specific announcement time may be influenced by the progress of underwriter allocations. Sometimes, underwriters may confirm the allocation of new stocks after the U.S. stock market has already opened, meaning trading activity may occur in the late hours of Beijing time.

Strategies for Participating in U.S. Stock IPOs

• Stock Selection: Choose promising new stocks for subscription. For details, please visit the official website of uSMART.
• Risk Management: Understand the fundamentals and market expectations of new stocks, allocate funds reasonably, and avoid over-concentration.
• Market Research: Keep an eye on market trends and new stock issuance information to seize opportunities.
• Tax Considerations: Understand tax policies in different countries and regions, and plan investments accordingly.

Process of Participating in U.S. Stock IPOs

• Open the uSMART app and follow the account opening instructions.
• Click on 'Trading' at the bottom of the homepage, then select 'More.'
• Choose 'IPO' and complete the subscription.

  

Important Notice and Disclaimer:

This document is prepared by uSMART. This document is not intended for or directed at persons under local laws or regulations that prohibit the distribution or publication of this document. This document is provided to the recipient only, and the information, materials, or analytical tools contained herein are provided to the recipient for informational and reference purposes only. This document should not be construed in any jurisdiction as constituting an offer, solicitation, recommendation, inducement, endorsement, opinion, or guarantee to purchase, sell, or trade any securities, financial products, or instruments or to engage in any investment or any transaction of any kind, nor is there any intention to solicit or invite the purchase or sale of any securities.

Investment involves risks. Before making investment decisions, the recipient should carefully read relevant offering documents to obtain further information, including risk factors. Past performance data does not imply similar future performance. Investments in the asset categories mentioned in this document may not be suitable for all recipients. This document does not consider the individual objectives, financial situation, or needs of any specific person who may access this document. Before engaging in any transactions, the recipient should take reasonable actions based on personal objectives and circumstances to ensure a clear understanding of the transaction and independently evaluate the suitability of the transaction, including assessing the potential risks and returns of the transaction, and if necessary, seek independent professional advice. The information and opinions contained in this document reflect the judgment of uSMART as of its publication date, and no further notice will be given in the event of changes. Neither we or our respective directors, officers or employees will be responsible for any losses or damages which any person may suffer or incur as a result of relying upon anything stated or omitted from this article.

The value of these securities and the income from them may fall or rise. Your investment is subject to investment risk, including loss of income and capital invested. Past performance figures as well as any projection or forecast used in this article is not indicative of its future performance.

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