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Topics: Trade IPOs
All customers with a valid individual, joint, or retirement brokerage account are eligible to participate in an IPO.
An initial public offering (IPO) is when a private company sells shares of its stock to the public for the first time.
After an IPO the company becomes public and its shares are traded on an exchange.
To learn more about IPOs at Motif Investing go to our IPO page.
Sign up for a free Motif Investing account and then from your Motif dashboard go to “Trading” and select “IPOs”. From this page you can indicate your interest in an IPO or sign up to be on our IPO email list to be notified about upcoming IPOs.
We do not charge any trading commissions or fees for IPO purchases.
- Sign up for a free Motif Investing account and complete the brokerage application.
We typically review and approve applications received in good order within 24 hours.
- Indicate your interest in an upcoming IPO and answer a few questions to confirm your personal information.
Once confirmed you’ll be able to review a preliminary prospectus of the offering.
- Determine how much you’d like to invest in an IPO and place a conditional order.
After you’ve placed your order, remember to fund your Motif Investing account.
- Keep an eye out for additional communications from Motif Investing about the IPO you wish to participate in. We may send you additional documentation that you’ll need to review and acknowledge. For example, if the final IPO price moves 20% above or below the preliminary price range or if there are other material changes to the offering.
- Receive your IPO shares. Once the IPO closes we will allocate shares based on the final number conditional orders from customers and notify you via email. If there’s a limited number of shares available you may receive less shares than you originally requested or no shares at all. You will only pay for the shares that you actually receive.
The minimum amount to purchase IPO shares is $250. The maximum amount depends on the particular IPO and is specified when you place a conditional order.
At this time Motif only accepts IPO orders in dollar amounts.
Yes. We will convert your final IPO allocation based on dollar amount to the nearest .01 fractional share.
A secondary offering occurs when a company that already has its stock publicly traded on an exchange, issues additional shares to the public. A secondary offering is often priced at or slightly below the prevailing market price of the stock at the time of effectiveness and pricing and, after the shares are distributed, will increase the number of shares the company has publicly available, which in the short terms can have a dilutive impact on the share price of the stock.
IPO orders can be canceled for several reasons, including:
- Your IPO Checklist was not completed prior to the IPO closing.
- There was insufficient funds to purchase your IPO order.
- You did not confirm the final IPO price when a confirmation was required.
From your Motif dashboard go to “Trading” and select “IPOs”, then select the desired IPO.
If there are material changes to an IPO offering you may be required to confirm your conditional order. If so, you will be notified via email to confirm your order usually within a 2 hour confirmation window. If you do not provide confirmation then your order will be canceled.
To participate in an IPO at Motif you agree to receive electronic notifications primarily via email. You are responsible for monitoring your primary email account associated with Motif for updates as well as requests for additional information.
You will be notified once the IPO has priced. At that time, you will have approximately two hours to cancel your order before we accept and finalize your order.
If the final price of an IPO is 20% above or below the price range at the time you entered your order, you will need to confirm your order at the final price, usually within a two hour time period (a countdown will appear on the IPO page). This time period is called the “confirmation window”. If you do not confirm your order before the confirmation window closes then your order will be canceled.
Partially funded orders will be canceled.
Your IPO order must be funded prior to the confirmation window closing (usually 3 hours after final pricing). If you have insufficient funds prior to close of the confirmation window to purchase your IPO shares, your order will be canceled.
If you plan to fund via electronic check (ACH) please allow 3 business days for processing.
No. You must purchase IPO shares using funds available in your Motif account. Regulations prohibit purchasing IPO shares on margin.
You can place an order to sell your shares when the stock symbol is active and shares have begun trading on the secondary market.
Yes. We will notify you via email of any price range changes and when the final IPO price is available.
Can I place a market order to purchase shares of an IPO before the shares begin trading on an exchange?
Motif cannot accept market orders to purchase shares of a non-public company (since shares are not yet available on an exchange).
Once an IPO is complete shares will begin trading on an exchange and you will be able to place market orders.
When you fund an IPO order, the amount to fund the purchase is reserved and your buying power will be adjusted. After your IPO shares are allocated, any funds not used for the IPO will be returned and your total buying power adjusted back.
Your conditional order will be canceled and you will be ineligible to receive any IPO shares.
Your order will be canceled if your conditional order requires confirmation
(see FAQ “Do I need to confirm my conditional order?”).
You may place an IPO order as long as we’re still taking orders on an IPO. Keep in mind that investor interest in IPOs vary; an IPO can become oversubscribed and Motif may close the window for accepting new orders at any time.
You also need to consider whether you have enough funds in your account. If you don’t have enough funds you may not have enough time to transfer funds to cover an IPO purchase. For example, an ACH bank transfer can take 2-3 business days or more to complete.
You have a few different funding options:
- Bank transfer (ACH). Allow 3 business days to complete.
- Sell other owned positions in your Motif account. Proceeds from sales must be in your account before an IPO closes.
- Other incoming funds such as checks or wires. Funds must be in your account before an IPO closes.