Friendly Hands

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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.

INVESTOPEDIA EXPLAINS '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.

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