When Senator John McCain won the New Hampshire primary, on Feb. 1st, beating the republican frontrunner, George W. Bush by 18%, it suddenly threw the presidential race wide open. Whether or not McCain can sustain the momentum into South Carolina and make a splash on Super Tuesday in Californiaor even get on the ballot in the state of New York (this March)is another story. But the notion that a maverick war hero whose message is to reform government and give it back to the people, could capture the Republican nomination away from the partys anointed son, is now a possibility.
The same can be said for the movement to democratize the IPO process so that individual investors can participate in the allocation. See "Will Equality in the IPO Market Make the IPO 'Pop' Fizzle"
While there is no single individual crusading for a more open IPO market, now an insurgent-led movement, is gaining grass roots support to reform the IPO pricing and distributionprocess, utilizing the power of technology and the Internet to reach millions of online investors.
At first, the charge was being led by online brokers such as E*Trades E*Offering, an online investment bank, as well as Wit Capital, and W.R. Hambrecht & Co. with its Dutch auction, but theyve had limited success in cracking the stranglehold that lead managers hold over the supply.
New entrants such as FBR.com and the online investment bank formed by Charles Schwab, Ameritrade and TD Waterhouse, are building systems that will factor retail investor demand into the pricing of IPOs, so they can give investors a fair shake in the IPO allocation.
Paying attention to the individual, and leveling the playing field, is not unusual these days given that 48.2%, or nearly half of American households, own equities either in mutual funds or individually, according to a survey released by the SIA and the Investment Company Institute last fall.
But there are still barriers to investment information. Even if investors succeed in obtaining access to IPOs, they have to gain admission to online roadshows. And the politics of exclusion still keeps individual investors out of the earnings calls that corporations conduct with analysts and institutional investors, though webcasting services like Streetfusion.com are letting individuals listen in.
But some Internet sites are giving power back to the people by allowing individuals to enter their own earnings estimates for a stock. See "Internet Sites Turn Up the Volume on Whisper Numbers". Because the individual investor is better informed, the whisper number is eroding the credibility of Wall Streets consensus earnings estimates from suppliers such as First Call and Zacks. Individuals, as a rule, have access to consensus earnings estimates because market data providers are only allowed to give attributed analysts estimates to institutions, explains a market data executive. Now, in the evolving world of online investing, those annoying individuals are taking charge of the information.