Gamefly, a Netflix-like service which offers video games by mail, has filed to the public via an initial public offering (IPO). Gamefly’s IPO was filed for on February 10th, 2010, however, no date has been set for the IPO.
Many that are fans of the service are wondering whether or not they can get a discounted price on Gamefly Stock before the company launches its initial public offering. Unfortunately, shares are typically sold directly to customer of large brokerage firms and mutual funds at a set IPO price, then the stock starts to trade at that price until initial investors sell their shares. After that, regular investors are free to buy stock. Typically the price that retail investors have to pay is higher than the IPO, but not always.
Sometimes companies will offer their customers the chance to buy shares at the IPO price. Sometimes that can be a deal because the IPO price can be lower than the price at which shares start to trade on the stock market, but that is not always the case. You are taking a chance if a company offers you shares at the IPO price because shares could fall below the IPO price during the first day of trading, meaning you would have been better off buying the shares at the market price.
So far, for Gamefly’s IPO, the company has not announced plans to offer shares to their customers at the IPO price. If you want to get in at the IPO price, you’ll want to check with your stock broker, or check with an online brokerage such as Fidelity or Schwab, which might get some shares and be able to allocate some to you. Chances are, you’ll have to buy the shares when they start to trade publicly.
If you’re not familiar with Gamefly, it’s a service along the same lines at Netflix, which targets the video game crowd. The service typically costs $8.95 per month, or you can get a free trial with this link. After creating your account, you simply choose the games that you’d like to play and add them to your queue. Gamefly will send the games that you’ve added to you overnight. After you receive them in the mail you can play as long as you want without having to worry about a late fee. After you’re done with the game, simply send the games back to the Gamefly with the envelope that they provide and they’ll send you the next games on your list. Gamefly currently has more than 7,000 titles available across a number of different platforms, including the Play Station 3, Xbox 360, Play Station Portable, Play Station 2, Wii, GameCube, DS and GameBoy advance.
