An IPO price (company valuation) is determined based on the bank that is underwriting it. An underwriting bank tries to issue the shares at a price that reflects the value of the company. If the bank values the company too low, large profits go to investors as the stock price jumps when trading begins causing the company to lose out on money. However, if the bank overvalues the company, the company will make extra money and investors end up the losers as they will sell the stock as no one wants to invest in a company they feel is overvalued. Hype or not, a successful IPO should stay relatively flat.

How a high-hype IPO like Alibaba, expect the first few days to rocket like Pollo Loco's.

After that week or two, it may start to even out, so sell if you made a gain.

Alibaba shares are expected to start trading in early September after Labor Day. How much do you anticipate each share starting out at? Is there a certain strategy experts use when IPOs first start such as waiting a while for the price to level out? What is your long term prognosis for this stock? Thank you.