New issues

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13. Conclusion

New issues have a seductive quality that is not always evident in the secondary market. Often they involve start-up companies in high-technology businesses, and the prospect of catching 'the next Cisco Systems' early is almost too much for investors to resist.

• There are profits to be made from new issues, whether from stagging or from longer-term investing, but there are also losses.
• Subject a new issue prospectus to scrutiny. Does it stack up as a business with genuine potential?
• Give some thought to who the sponsors of the issue are. Are they recognisable blue chip companies or people you've never heard of?
• Read what the financial press is saying about the new issue. Do you detect a hint of scepticism, and what are they saying about the price?
• If you decide to apply, make sure you fill in the form properly, and don't submit multiple applications.
• Decide on your strategy before you apply. Do you intend to sell immediately the shares start trading, or do you intend to hold for a longer period?

You have now completed the course. To test your knowledge, take the Assessment test.

1. After Sid - a short history of the new issues market 2. Do new issues offer good value? 3. Types of new issue 4. Applying via brokers and intermediaries 5. The prospectus 6. What to look for in the prospectus (1) - directors and advisers 7. What to look for in the prospectus (2) - standard company analysis 8. What to look for in the prospectus (3) - blue-sky company analysis 9. Making your application 10. Stagging 11. A word on warrants 12. A tale of two issues 13. Conclusion

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