DEFINITION of 'Friendly Hands'

A nickname for investors in an IPO who will likely hold onto the security for a long time. Friendly hands alludes to IPO subscribers who are not interested in purchasing the new issue with the hopes of quickly flipping the shares for a quick profit. Long term investment in IPOs tends to reduce stock volatility, thus reducing the chances of a sudden crash in the stock's value.

BREAKING DOWN 'Friendly Hands'

The opposite of a friendly hands investor would be a flipper, who is more interested in profiting from a hot IPO issue by selling it almost immediately after purchase. In contrast to a flipper, a friendly hand generally tends to look for stable, long-term profits instead of the quick fix. Although they both play very different roles in an IPO placement, both flippers and friendly hands play an important role in the marketplace.

RELATED TERMS
  1. Flipper

    1. A short-term investor or day trader who buys pre-IPO shares, ...
  2. Friends and Family Shares

    A company's stock that is offered to preferred individuals, prior ...
  3. Depository Trust Company Tracking ...

    A service, used by underwriting firms, that provides a method ...
  4. Friendly Loan

    A loan agreement between associates. This type of loan is known ...
  5. Hot Issue

    An issue that sells at a premium over the public offering price ...
  6. Crash

    A sudden and significant decline in the value of a market. A ...
Related Articles
  1. Insurance

    IPO Flippers And The Companies Who Hate Them (TWTR, ETSY)

    Learn how flipping activity affects an initial public offering.
  2. Investing

    Top 5 Must-Haves For Flipping Houses

    Not everyone can make money in this field. Find out what you need before you buy in.
  3. Investing

    Top 5 Must-Haves For Flipping Houses

    Flipping a house means a lot more than just giving it a fresh coat of paint and a new mailbox. Here's what else you'll need.
  4. Financial Advisor

    Why You Shouldn't Manage Your Friends' Money

    Your pals may like your returns, but it isn't wise for you to manage their money.
  5. Personal Finance

    Budget Without Blowing Off Your Friends

    With a little planning, you can maintain your social life without breaking the bank.
  6. Investing

    Read This Before Buying a Vacation Home with Friends

    Going in with friends to buy a vacation home will save you on the mortgage and expenses. But if there's conflict, it could end up costing your more.
  7. Financial Advisor

    Is the Stock Market Crashing? 5 Signs to Consider

    Learn about some signs of a potential stock market crash including a high level of margin debt, lots of IPOs, M&A activity and technical factors.
  8. Investing

    How The Stock Market Works

    When you buy a stock, you buy a piece of a company.
  9. Managing Wealth

    Before You Invest in a Rental House with a Friend

    Investment property has advantages, but before you purchase a rental house with a pal, it’s smart to know what the challenges might be.
  10. Investing

    How An IPO Is Valued

    The initial valuation of an IPO can determine the success or failure of a specific stock - but how is that price determined?
RELATED FAQS
  1. Can mutual funds invest in IPOs?

    Learn whether mutual funds can invest in IPOs. IPO investing is appealing because there is a big upside, but there is considerable ... Read Answer >>
  2. What are the different types of IPO issued?

    Learn about the two ways for a company to go public: fixed price and book building. Under fixed price, the share price is ... Read Answer >>
  3. Are IPOs available to short sell immediately upon trading, or is there a time limit ...

    The quick answer to this question is that an IPO can be shorted upon initial trading, but it is not an easy thing to do at ... Read Answer >>
  4. What is the difference between an IPO and a private placement?

    Learn the differences between private placements and initial public offerings that companies use to raise capital through ... Read Answer >>
  5. How do investors lose money when the stock market crashes?

    Over the last hundred years, there have been several large stock market crashes that have plagued the American financial ... Read Answer >>
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center