Hilton IPO Shares US

NewBoy12

Just read that Hilton Worldwide Holdings Inc will be issuing an IPO – shares to set between $18 to $21 each.

Any thoughts?

Also how does someone in the UK get onto this, can someone in the UK buy into a US IPO?

bowlhead99

NewBoy12 wrote: »

Just read that Hilton Worldwide Holdings Inc will be issuing an IPO – shares to set between $18 to $21 each.

Any thoughts?

Once listed they will be yet another name among the many thousands of companies listed in the US, UK, Europe and beyond. I am not intimately familiar with the Hilton operations but have no reason to expect that $21/share undervalues the business.

So I would need a compelling reason why the next £1000 I invest should be in Hilton rather than the literally thousands of other investible opportunities which I face. Do you have one? "It might go up" is not a credible answer, given the other opportunities out there.

Also how does someone in the UK get onto this, can someone in the UK buy into a US IPO?

With great difficulty, perhaps. But US IPOs are a bit different to UK IPOs - over here there is usually an allocation set aside for retail punters as well as the big institutions. However in the US, the SEC does not care for regulating the business decision who the company issues shares to. And the company would generally prefer a large stable investor base of large institutions; therefore the institutions (and some high net worth private investors) will take pretty much all of the initial allocation. It effectively goes to a few large 'underwriting' banks who will buy all the shares and place them with institutions.

It is hard enough to get in on a popular IPO as a US resident individual, and for a non-resident such as yourself who presumably doesn't already have an account with a US broker you've got no chance. See this SEC memo "IPOs - Why Individuals Have Difficulty Getting Shares"

The process works similarly to a UK IPO - eligible investors make conditional offers to buy the shares, typically via their broker-dealers who will look to buy as nominee on behalf of all their clients. and you may or may not get scaled back.

However, in order to get a chance to even play at the table you may need to be a premium customer of the broker, and have a certain level of net worth, account size or trading history so that the broker knows you can handle the risk. And if you have a track record of asking for IPO shares and instantly selling them on (flipping) you might have a black mark against your name and the broker gives them to someone else instead.

If you can meet those criteria you then fill in certain other eligibility forms (example, if you were a director of a public company you may be ineligible to participate directly, because the regulator, FINRA, doesn't want the investment banks or brokers allocating the shares to blatantly allocate some tasty IPO shares to someone that then would be looking to place some investment banking business of their own - "you scratch my back / quid pro quo" rules).

After that, you might be able to put your name down for some shares. As an example, here's the first part of the 'IPO eligibility' section of the website for TD Ameritrade, one of the biggest retail brokers in the US (I have an account with them).

To purchase IPO shares, you must complete a personal and financial profile, and read and agree to the rules and regulations affecting new issue investing. Each account being registered must have a value of at least $250,000, or have completed 30 trades in the last 3 months. Accounts must also meet certain eligibility requirements with respect to investment objectives and financial status. Your eligibility information will be validated each time you want to purchase an IPO. You must complete and submit an IPO Eligibility Form 5130 before you can be deemed eligible to participate. (See below.) For more information, contact us at xxxxxxxx.

Important information about "flipping"
TD Ameritrade defines "flipping" as buying shares of an IPO and selling them within 30 calendar days from the date the IPO was initially publicly traded. Customers may be excluded from participating in future IPOs if a pattern of selling IPO shares within 30 calendar days exists.

IPO Eligibility Form 5130

In order to determine your eligibility to purchase IPOs through TD Ameritrade, you must first fill out an IPO Eligibility Form 5130 and complete the following steps:

Fax your completed Form 5130 to 866-468-6268
Please allow 3-5 hours for the form to be processed
Place your indication of interest by calling 866-678-7233

Download IPO Eligibility Form 5130

Rules & Regulations for IPOs

Please read the Risk Disclosure Statement and Rules and Regulations document below. You may print or save them for future reference
..... etc....

planteria

did you ever buy into Hilton, NewBoy?

they are well above the IPO price, with some sharp peaks & troughs since.

http://www.hl.co.uk/shares/shares-search-results/h/hilton-worldwide-holdings-inc-usd0.01

not currently paying a dividend, apparently. anyone any idea if that is likely to change? i'd have thought it will be important, going forwards, with IHG, for example, paying c2%

planteria

IHG:

http://www.hl.co.uk/shares/shares-search-results/i/intercontinental-hotels-ord-14-194329p