Whenever new scrips are offered to public,the share prices are fixed arbitararily with an exorbhitant premium.How to find that such a higher premium is justified?
2007-11-24 02:43:43 · 3 answers · asked by shankar v 2 in Business & Finance ➔ Investing
1) Read the prospectus to ascertain the valuation.
2) Try to gauge how hot an issue is likely to be.
3) Factor in the general market conditions.
4) Watch how it trades to see which way it wants to go.
Look at VMW. It was overvalued from the start but that did not prevent it form having a good run as all the above factors were favorable.
2007-11-24 07:08:54 · answer #1 · answered by Anonymous · 0⤊ 0⤋
The higher the potential for explosive sales and explosive net income the higher the premium will be.
2007-11-24 22:45:45 · answer #2 · answered by !!! 7 · 0⤊ 0⤋
Wait a week and see where the equilibrium is? Time always tells.
2007-11-24 10:46:34 · answer #3 · answered by beckoningsubstitutes 5 · 0⤊ 0⤋