IPO - CricStox

IPO: How to Gain a First-Mover Advantage?

4 mins read

We believe that so far it’s going fairly well on the Cricstox app and all of you are enjoying trading in the stocks of your favorite cricketers. Here we come again with yet another important aspect of the app, i.e. the IPO (Initial Public Offering). 

What is an IPO?

Like the real-life stock markets, the concept of IPO is to launch new cricketers on the platform. Predetermined quantities of stock are offered at a fixed price, also known as the listing price. The listing price of the cricketer is based on a mathematical calculation designed by CricStox. The formula is derived from factors such as historical statistics of the players, recency, and ICC rankings.

IPOs help users gain a first-mover advantage since the prices are expected to usually move upwards from the price at which they debut on the Cricstox market. But not necessarily, the price trend is higher. Let’s discuss the price movement scenarios once the stocks are listed on the app. 

 

SCENARIO 1: WHEN THE PRICES MOVE HIGHER

This is an ideal scenario. The entire point of subscribing to the IPO makes sense when the stock prices go higher than the listing price as the user earns a profit on their investment. Most players that have been listed on the app have seen the prices advance higher.

SCENARIO 2: WHEN THE PRICES MOVE LOWER

This is an unfavorable situation from an investment point of view but that doesn’t mean it’s a lost opportunity. In this case, the key is to wait a little. Given the stock prices are determined by the market forces & are influenced by the demand and supply….the movements can be in either direction. Even in real-life stock markets, the prices fluctuate on both sides of the graph. 

Taking an example from the app – 

Chris Gayle was listed at 46 coins per stock. However, the stock made its debut on the Cricstox market at 42 coins per stock, which is almost 9% lower than its issue price. The subscribers to this IPO panicked a little. As a result, the stock prices further went down to an all-time low of 37.3 coins on 12th July. Given that Gayle is a lead player of the West Indies team and has a huge potential….it was a given that the prices would rebound.

Patience was all that was needed. Interestingly on July 13, the stock skyrocketed 42% resulting in one of the highest intraday moves on the platform so far. Ever since then the prices have managed to stay well above their IPO price.  

Every sale transaction helps you earn coins in your kitty. So it becomes imperative that the user engages in active trade to turn the situation profitable for him/her.

‘Great trades aren’t born or made overnight. It takes patience, discipline and consistency to master the art of trading.’ So even if your prices go below the listing price, don’t panic. Just wait till the prices bounce back to materialize your trade to a profitable one.

Leaving you all with some food for thought….until then keep subscribing to the IPOs.

READ MORE – Welcome to the New World of Trading

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