For some traders, the shares of companies that have just gone public are usually interesting to trade. Stocks that have just gone public generally experience a rapid increase on the first day on the floor.
On the first day of listing on the Exchange, the auto reject limit for publicly traded shares is 2x the normal author reject price, so the increase in the price of shares that have just been listed on the first day is usually very high and fast. If you don't understand about auto reject, please read: Meaning and Illustration of Auto Reject Stock.
In addition, shares that have just been listed on the Exchange, usually increase the confidence of investors and traders that the price of these shares can rise quickly in the first few months. Moreover, if a company that has just gone public is a company whose products are widely known by the public.
If you think that companies that have just gone public, their stock prices will rise quickly and are very good for trading, your thinking is WRONG. Stocks that have just been listed on the stock exchange are NOT ALWAYS the price of their shares will rise quickly. The shares that are listed on the Stock Exchange and their companies are already "known to the public", their share price also does not guarantee that they will rise quickly. How come, Bung Heze?
First, it does not rule out the possibility of stocks that have just taken the floor, the price can rise quickly. However, all of that is also greatly influenced by market conditions. When WTON shares are listed on the Exchange, in the first half year the price can increase up to 2 times. The increase in WTON that was too high was more because in 2014 the stock market was indeed euphoric (Jokowi Effect).
But let's look at PPRO's shares, which were also rumored to be going up fast after going public. In mid-2015 when it was listed on the Stock Exchange, PPRO's share price had dropped to Rp127 per share (from the highest price of 250). This is because the 2015 stock market was indeed sluggish, so PPRO was also depressed.
Second, we will never know what market participants want. The stock bid-offer queue is filled by hundreds or even thousands of market participants. Can you read all of their heads? Do they want to increase the stock price, or even lower the price?
Moreover, if the stock has just gone public, there is no chart at all. You will not be able to know whether the stock will fly or move at the same price. Take a look at the POWR stocks below.
POWR is one of the infrastructure (electrical) stocks. Considering the government's infrastructure projects are in full swing, this stock should have gone up fast. But the truth? You can see for yourself the graph for the first 6 months since the IPO. Take a look at the PRDA stocks below.
Who doesn't know Prodia is a pharmaceutical company? This company's products and names are widely known by the public. However, a few days after going public, the stock price plunged mercilessly.
If you say that PRDA's share price will rise quickly just because you think the company is publicly known, then you are jumping to conclusions. It is difficult to conclude whether stocks that have recently gone public will rise quickly in the short term or not. Because the basis you use for analysis is still very minimal.
WSBP SHARE
WSBP's stock that was touted to be going up after the IPO turned out to be nothing like what other analysts and traders thought. For several months, the stock price tends to fall. I always recommend WSBP to be invested, given the prospect of its business sector rather than being traded. Also read: Invest Your Capital: PPRO and WSBP.
Stocks that have just gone public, usually on the first day will immediately go up fast. However, if you think you are chasing the stock by buying it and hoping to continue to rise, you are wrong. Because the increase in stocks on the first day on the floor generally occurs very quickly. You will not have time to place a match buy order. At most your queue status is open.
And stocks that rose very quickly on the first day on the floor, usually will also correct quickly. So if you chase after the stocks that floored on the first day, chances are, your stock is stuck.
Lastly, as I have explained, why should you avoid buying shares that have just been listed on the Exchange, even though the company is already known to the public? Because there are NO GRAPHICS of the stocks that have just been listed on the Stock Exchange. How can you predict the direction of the stock price? Most of the new stocks that have just been listed on the Stock Exchange do not immediately increase in price. But down first, even in the span of months.
