Bidding on a Capital Raise

Your funds on Stake

When you submit a bid for an IPO or Placement shares, Stake will place a hold on the selected amount of AUD in your account. This is just like what happens when you place a buy order for other stocks. The process is necessary to ensure that you’ll have the specific amount of AUD available for settlement if your bid is successful.

After you’ve completed this action, Stake will take care of the rest. There’s no need for you to create additional accounts or take any extra steps. You can just sit back and wait until your allocated shares land in your Stake Portfolio. If you have any questions about your bid, please feel free to contact the team at capital-raises@hellostake.com.

How shares are allocated

Stake will handle communications with the Lead Manager - this is the broker assisting the company to issue its IPO or Placement shares. Once bidding closes, Stake will let them know how many shares our customers have bid for. The Lead Manager also receives other bids from outside of Stake. After they’ve received all the bids, they compare the total amount to what the company was aiming to raise and give Stake an allocation of shares.

The IPO or Placement can be oversubscribed if there was a lot of demand and the Lead Manager received more bids than the company was looking to raise. In this situation there will be a ‘scaleback’, meaning Stake won’t be allocated the full amount of shares bid for by customers. If this occurs, Stake aims to allocate each customer the minimum bid amount and then divide the remaining allocation into the same percentage to add to each customer’s bid.

In the event that the Lead Manager does not receive enough bids to cover all minimum amounts, Stake will allocate the minimum bid amount to each customer starting with the earliest bid, until the allocation is exhausted. This means if an IPO or Placement is either over or under subscribed, you may not receive the full amount you bid for. Occasionally, the company could also cancel their plans to issue shares. If a proportion of or all the funds you used to bid are not allocated, they will be returned to your AUD balance.

Once the allocation has been finalised, Stake will send an email letting you know how many IPO or Placement shares you’ve secured. About a week before the shares list on the ASX, you’ll be able to view them as holdings in your portfolio on Stake. However, they won’t be available to trade until the actual listing or shortly after.

Staying up to date

Depending on the deal, the process detailed above for IPO shares usually takes several weeks, while Placement shares can complete it within several days. Stake will email you about any relevant updates. This includes when you’ve been allocated shares and when the shares start trading. You can also check the progress of any bids in the Pending Orders section of your Stake App. If you have any questions about your bid, you can contact Stake’s Capital Raises team by emailing capital-raises@hellostake.com.