Flipping

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Flipping

Buying shares in an initial public offering (IPO), and then selling the shares immediately after the start of public trading to turn an immediate profit.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Flipping

1. The act or practice of buying IPOs only to resell them at a substantial profit very quickly. Flipping is a short-term investment strategy that operates on the assumption or existence of liquid markets. Institutional investors engage in flipping at a greater rate than individual investors as they have the most shares available to them at the offer price. Flipping, when done over and over by a large number of investors, can lead to a speculative bubble. See also: Stock jobbing.

2. The act or practice of buying real estate at a low or moderate price with the intent to resell it for a profit in a short amount of time. Flipping takes two main forms. One may buy several properties, intending to sell them in only a few months hoping that that price goes up. This is most common in areas expected to become big developments. On the other hand, one may buy a single property often with improvements already on it and renovate it with the intention to sell it for a much higher price.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

flipping

The immediate selling of shares purchased in an initial public offering. Flipping is especially popular in a hot IPO market when newly issued shares can soar in price when they hit the secondary market. Investment banking firms underwriting new issues generally discourage flipping, in large part because it can depress a stock's price in the secondary market.
Case Study In late 2001 UBS PaineWebber issued a memo to its branch offices that the firm intended to fine its brokers whose customers engaged in flipping shares purchased in initial public offerings underwritten by the firm. According to the policy, brokers would be required to pay a fine equal to 200% of their original commission. Following complaints from the firm's brokers, PaineWebber withdrew the proposal but indicated it would monitor the investment activity of clients who participated in new issues and adjust future allocations of shares in subsequent IPOs. Investment banking firms dislike flipping because it tends to destabilize trading and depress the stock's price, both of which are likely to anger management of the issuing company.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
"We're looking for fantastic personalities with records for flipping houses," said casting agent, Brian Smith.
"A lot of people were flipping houses. They would buy a house, call us to come in and renovate it and then turn around and sell it as fast as we could finish the job."
It has inspired many people to get into the business of flipping houses. Merrill encourages anyone wanting to get into real estate to realize that they are going to have to do the hard work of seeking out their own investments in the early stages.
Bolton worked for a vending company, invested wisely, got his real estate license and continues to make money by flipping houses. "I still get jittery," Bolton admits.
"They're committed to their business and to their future together as they work together on the show." The source also said: "They're flipping houses, so [their production schedule] is all dependent on the construction, contractors, et cetera, but for the immediate future, they're still continuing to film."
Designed to teach new and prospective real estate investors how to start flipping houses, these free live real estate investing workshops attracted hundreds of visitors in multiple cities, spanning the greater Chicago, Dallas, Sacramento, Las Vegas and Edmonton markets.
Owning real estate always has been more than getting easy loans, leveraging equities or flipping houses. It's about being a prudent steward of a lasting asset, one that you save for, care for, pay off and hopefully retire with.
"When we tell people that we have been flipping houses for over 40 years, here's the number one thing we hear.
With Ellen's recent success in flipping houses, the product range is expected to include home decorations, gift sets, garden equipment, men and women's clothing and accessories as well as a range of pet products.
Jeff has been in real estate for over 10 years and decided to become a real estate agent because of his background of flipping houses with his family.
The topics are extremely relevant in today's real estate market, as flipping houses and private money are two of the most critical topics for beginning investors.