WASHINGTON, October 5, 2017 – In Thursday’s late column, we described to you the weird and unfair IPO offering for server farm company Switch, Inc. (SWCH) and why we were going to put in for shares anyway, since it looked like a decent short term bet.
In fact, we did put in for 200 shares at the offering price of $17, when the offering priced above its range – usually a good sign that there’s interest in the offer.
Unfortunately, Switch’s IPO shares were even hotter than they looked. As a predictable result, we didn’t get any shares at all, making the contents of yesterday’s rant something of a moot point. SWCH is currently trading frantically around the $24 per share range, a healthy gain at this point of approximately 40 percent. Nice work if you can get it.
As we’ve said many times before, if any issue gets hot, however many shares a given brokerage gets, they go first and foremost to the brokerage’s wealthiest clients as sort of a “gift” for staying with the firm. The rich clients generally flip the shares for a fat, very short-term profit, and that’s that.
Little guys rarely get in on good stuff like this for that very reason. It’s unfair, irritating, and it happens all the time. Unfortunately, it’s also perfectly legal.
So we’ll fume about missing out on those SWCH shares, as much as we dislike the greed of its owner (voting rights are ruthlessly diluted by other more favored classes of stock). Then we’ll move on. It’s just another reason – one of many – why the rich consistently get richer than you and me.
Have a good weekend.