[sammyg2]

Iffn it were me, I'd pick 4 or 5 other companies in the same industrial sector as the IPO,
companies the IPO will have to compete with.
Based on their key financial statistics, I'd rank all 5 best to worst.

Then I'd rank projected earnings, market growth, inventory, assets, etc all in an atrempt to come up with the big answer: MARKET CAP.

Ya figure out the market cap and that tells you what the company is really worth or at least SHOULD be worth.
Weigh it against the competition apples to apples so it's ajusted for that particuular sector.

Then find out how many total shares will be CREATED. Note that's way different than number of shares offered.
Usually they set aside a whole bunch for themselves and their cronies.

Figure out the number of total shares created (common and preferred) and divide the projected market cap by the number of shares, BINGO! price per share.

Clear as mother's milk.



PS It doesn't really work that way tho because logic doesn't have much to do with IPOs, lots of it is emotions of small investors (bandwagonners) and big boys who buy large chunks for speculation and sell it off 4 hours after the initial opening after driving the price up 40% higher than it should be.

And since I'm not a big time inverstment house with lots of pull, I can't but up large chunks of a stock before it's officialy available.
So I'd have to be one of the sheep.
Which is why I'll never ever spend a penny on an IPO.