The IPO Flipping Game

According to an e-mail I received yesterday, as a long-standing Vonage customer, I am elegible to receive an allocation of IPO shares. Now, while I have been a satisfied Vonage customer, I'm not sure I'm confident in Vonage's long term value as an investment given the intense competition in this space. I saw Jim Cramer comment on Vonage on Mad Money a few days ago, and he was pessimistic on this offering's long-term prospects, but bullish on it's value as a day 1 flip.

And that's what I'm mulling over now. Do I have the appetite for the IPO flipping game? Well, many factors go into this. One, how much would I be willing to potentially lose on a learning experience? What strategies would I employ? A laddered series of limit orders? A dollar cost averaging strategy over a period of hours? What about fees?

Definitely, I need to do some research. In particular, I need to start with the following:

• What is the historical performance of day one IPOs?


• For the last 2/1/0.5 years?


• For technology IPOs?


• For IPOs of comparable size?


• Are there any common trading patterns?


• What are various analysts' target prices for various time durations?

Plus, there are other complications. The IPO will happen on May 23. Unfortunately, that will be day 1 of an on-site POC I'll be doing, so I won't be able to be glued to a ticker all day. How does this affect my play book?

Lots of work to be done here.