MBLX – Metabolix Inc and THRM – Thermage Inc IPOs

mblx-111006.jpgSo what’s some criteria that make an IPO such as MBLX – Metabolix Inc., a better first day trade than THRM – Thermage, Inc? The demand for shares pre-ipo is a good indicator.

Take a look at MBLX. First you check out the expected price range. Is the range then raised? That’s good. Is the stock priced at the high end of the range? Are more shares offered? Is the Underwriter a Goldman Sachs, or some investment boutique you’ve never heard of. I looked at the headlines for Metabolix Inc. and could see they looked positive. The shares priced at $14. So when the stock opens with a small premium in the 14-14.50 area, I buy. Place a stop below the offer price.

Now look at THRM – Thermage Inc. The price range was cut. The stock priced at $7 for it’s IPO. Weak demand means stay away. Sure enough, this stinker broke it’s offering of 7.

IPOs can trade fast, but can also give good reward/risk areas to trade off of too.

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