Here’s what happened when I participated in the Doximity Reserved Shares Program for doctors.
Well, friends, I told you I’d keep you updated on how my adventure went with Doximity IPO.
So here’s how it went down.
Monday Morning, June 28, 2021, I’m minding my own business, getting set up for the live, world premiere event of the Doximity IPO shares going for sale on the market, via the NYSE. The NYSE opens at 9:30 AM EST, so here I am, at my desk, getting my TOS (Think or Swim, TD Ameritrade’s trading platform) open, and thinking about my plan:
What is my risk? (How low will I let the price go before I sell, so as to “stop loss”— ie stop the bleed.)
What would my desired profit target be? (No way of predicting this, because it’s an IPO and has never traded before, so it’s a stab in the dark. It’s a straight-up guess.)
As I’m mulling it over, I see some headlines on the TOS sidebar: The stock price is over $50!
Wow.
So I open an article from Bloomberg, and the headline is Doximity Doubles in Trading Debut After IPO Raises $606 Million.
Damn.
Remember how their goal was to raise $536 M and get to a valuation of $4B? Well, they raised $606M and got to a market value of $9.5B. Okey-dokey, good going Underwriters (Goldman Sachs, JP Morgan, Morgan Stanley et al). They did their fucking job with the hyping FOR SURE.
I had an inkling things were going well on pricing night, when the IPO price was set at $26/share instead of the anticipated $20-23. That was a good sign. It’s always a good sign when the price is set higher than anticipated. (Good for the hype.)
Fidelity changed the max allotment for Reserved Shares Program participation to a cap of 250 shares instead of a max investment of $5000. That way, if we had been anticipating buying 250 shares (using the $20 share price and $5000 cap), we still could. Event though 250 shares now cost $6500.
So, back to minding my own business. So I’m getting set up, and I see this, and I’m like D.A.M.N. Might. Want. To. Consider. Selling. Like. Now.
At this point, it was 8 something in the morning, and although the market wasn’t open yet, pre-market trading was. Now, I would not normally participate in pre-market trading, because it’s volatile and wacky-do, but I got the sense that this volatility might give us the peak prices we’d see in the short term. And it went up to $57.98. At that point, I was like, yep, I’m out. So I put in a limit order for $57.30. And damn if it didn’t get filled at $57.3566. Nice!
I tuned in for the opening bell…and something called “beachbody” got to ring it…WTAF is this?
So, that’s my adventure. In and out. I had to call Fidelity to check that the trade was processing, because it was showing all sorts of different things on my screen— 102 shares allotted, all my money still in cash, and then the trades executed all at the same time. The nice guy on the other end was like, yeah, I don’t normally say this, but you should wait about a half hour and check back later because the system is confused. I laughed. (Because: money nerd humor) He’s right, you don’t normally wait around that long for these types of things…but, by the time we got off the phone, the values had normalized, and all was where it should be.
So, there it is in a nutshell.
The calculations:
250 shares purchased via Reserved Shares Program x $26 /share = $6500 investment
250 shares sold at 57.30 = 250 x $57.30 = $14,325
$14,325 – $6,500 = $7,825 profit
Return on Investment (ROI) = ($7825/$6500) x 100 = 120% return
And the money was only tied up for a few days, so the opportunity cost was minimum.
