The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.
RESEARCH TRIANGLE PARK, N.C. – The Skinny talked with ChannelAdvisor. ChannelAdvisor CEO Scot Wingo last week about whether he would make a “play” for Facebook just as he did for Google in huge Internet IPOs. Wingo dove in like millions of other people, buying “FB” on Nasdaq once shares became available.
And despite the fact FB fizzled with little “pop” in its opening price of $38, Wingo likes being a Facebook shareholder.
The Skinny asked him to recount his buying strategy, which he was able to execute despite a rash of technical issues as the Nasdaq had trouble handling the massive trade volume of more than 582 million shares.
Making the Play
“In stock buying there’s a concept called dollar cost averaging or DCA. I initially planned to split my investment amount in half and buy some stock at the beginning of the day and some at the end of the day,” Wingo explained. “That way if it went either up or down, I would get the average.
“After watching CNBC, I decided that I would modify that and do it in quarters.
“I put the first quarter in around 10am as a market order (pay any price). That filled around 11:30 at $41.
“I was in a meeting and checked at lunch and saw the price was down to $38. I figured the underwriters would not let it drop below $38 and that would be a great price to get it at. I put the other 3/4 into an order for $38.25. I checked at the end of the day and that order was filled around 3:45 for $38.10.
“I ended up with:
- 25% at $41
- 75% at $38.1
- DCA: $38.80
“I felt pretty good about that and was able to get in at essentially the IPO price.”
“Ride It Out”
“My concern is that if on day one the underwriters had to support he stock, perhaps when they stop doing that, the price will go below $38,” he added.
“I’m going to ride that out and see how the company does through it’s first year as a public company before making any further investments or selling anything.
“As I said before, this is a long-term (5-10 year) investment for me, so I’m willing to be patient.”