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Step 1
Talk to your brokerage firm or investment bank about buying IPOs. These stocks are typically available only to the preferred clients of the brokers or those clients who maintain a very high cash minimum balance at the bank.
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Step 2
Research the available IPOs in stock trades or publications. Often, you won't have much time to decide if you want to purchase the stocks because IPOs sell fairly quickly.
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Step 3
Find out why a company is offering an IPO. These stocks are a great way for a company to raise lots of money quickly. It pays to know if the company needs money for a new product or if the company is having budget problems.
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Step 4
Talk to your brokers about why the underwriter is selling the IPOs through best efforts. This method is less common and because the underwriter makes no promise of selling a certain amount of stocks, it could mean that the underwriter has some doubts about the value of the IPO.
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Step 5
Decide on the amount of stocks you wish to buy through the best efforts campaign. This type of offering doesn't fluctuate in value very much once it is initially offered. Don't expect to see stocks drop dramatically in price like in a Dutch auction.
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Step 6
Purchase your stocks through your brokerage firm or investment bank. Typically, best efforts offerings will not be listed electronically or available to the general stock buying public. You may need to speak with someone either in person or over the telephone to buy these stocks.
