Directed Share Program
How to participate in an initial public offering (“IPO”).
A Directed Share Program (the “Program”) allows an invited group of eligible individuals to purchase shares in an issuing company’s IPO through an E*TRADE brokerage account.
How the Directed Share Program process works
Complete the application
Refer to the email you received from us for a direct link to apply.
Submit indication of interest
Tell us the maximum number of shares you would be interested in purchasing.
Fund your account
Make sure you’ve funded your brokerage account with sufficient funds to cover any allocated shares.
Confirm your order
Once the IPO price is set, enter the number of shares you’d actually like to buy.
What is an initial public offering?
An initial public offering (“IPO”) is the first public issuance of stock by a privately held company. The company sells shares of its stock on an exchange such as the New York Stock Exchange or Nasdaq at an initial offering price set by the lead underwriter and the issuer. Once the shares begin trading, the company is said to have “gone public” and the price at any given time is determined by investor demand.
What is a stock?
Stock (also known as "shares" or "equity”) is a type of security that represents fractional ownership of an issuing corporation. Based on how much stock is owned, shareholders are entitled to a proportionate amount of the company’s assets and earnings. Important information about a company that is planning to go public can be found in the preliminary prospectus.
What is the preliminary prospectus?
The preliminary prospectus, sometimes referred to as the red herring, is a legal disclosure document that a company files with the Securities and Exchange Commission (“SEC”) in connection with a public offering of securities, such as an IPO. The prospectus is intended to provide information that would be important to an investor considering a purchase of the company’s stock. It includes details about the IPO and the company's business opportunity, industry, management, financials, risks, and ownership structure, among other things.
A Directed Share Program (the “Program”) is a program that allows individuals identified by an issuing company, such as officers, directors, employees, and other invited individuals, to purchase shares in the company’s IPO at the initial offering price, subject to certain eligibility requirements.
How do I participate in the Directed Share Program?
In order to be eligible, you have to be invited to the Program. If you were invited and are interested in participating in the Directed Share Program, click the Open an account button in the invitation email you received from E*TRADE. Then complete the application process by the deadline indicated, including:
1) Opening and funding an E*TRADE brokerage account.
2) Indicating the maximum number of shares you would be interested in purchasing. After the IPO price has been determined, you will receive another email from E*TRADE with instructions on how to confirm your indication of interest and pay for any shares you have been allocated if you haven’t already done so.
*We strongly encourage you to check your email regularly so you can be aware of any updates.
Am I obligated to participate in the offering?
No. The Directed Share Program is not a solicitation or recommendation that you purchase shares; it is simply an invitation by the issuing company. After reviewing the preliminary prospectus and the information provided on this website, you may decide not to participate in the Directed Share Program. Furthermore, you are under no obligation to purchase the shares that are made available to you, and you will have the opportunity to make your investment decision when you log back on to this website on the night the initial offering price is announced. If, at that time, you decide to purchase shares in the Program at the IPO price, you will be responsible for paying for the shares.
There is no guarantee that you will be allocated any or all of the number of shares you request. If the company determines that there are shares available for you to purchase, you will receive an email after the registration statement is declared effective and the offering price is set. All offerings are subject to prevailing market conditions and subject to change. The company might defer or even cancel its IPO.
*We strongly encourage you to check your email regularly so you can be aware of any updates.
The price per share will be determined once the registration statement is declared effective by the SEC. The preliminary prospectus (available on this website) contains a price range of the per share price at which the company and the underwriters expect to price the offering. However, there is no assurance that the actual offering price will be within this range. The final offering price per share could be above or below such price range. Notwithstanding any underwriter discount described in the final prospectus, there is no brokerage commission on the purchase of these shares.
During the application process, you will submit your indication of interest for the number of shares you wish to purchase in the Directed Share Program. At any point prior to the application deadline, you can return to this step to make changes (provided the number of shares remains in the listed range). After the IPO price is set and you return to the application to confirm the shares you will purchase, you will see the number of shares the company has allocated to you. The shares allocated will be the maximum number of shares available to you to purchase at that time. You will have the option to purchase the full amount of shares listed, a partial amount, or to not purchase any shares at all. Once you complete the confirmation step, your purchase order is complete and the number of shares confirmed cannot be changed.
Am I required to open an account in order to participate in the Directed Share Program?
Yes. Each participant must have an E*TRADE brokerage account to participate in the directed share program.
No. You will need to have an E*TRADE brokerage account in order to purchase shares through the Directed Share Program. Once the trade has settled and full payment of the shares has been received by E*TRADE, you will have the opportunity to transfer the shares to another firm as described below.
Upon expiration of any applicable lock-up period, and other trading restrictions to which you may be subject (e.g., company blackouts), you may elect to sell the shares you purchased in the Directed Share Program after the stock has begun trading. If you wish to place a sell order you can do so on etrade.com or via the E*TRADE Mobile app.
How can I verify if payment has been made in my account?
After you have confirmed your indication of interest to purchase allocated shares, you can proceed to set up your payment via an online transfer, also referred to as an Automated Clearing House (“ACH”) transfer, wire transfer, or mobile deposit. Click here to fund your account. To view payment status and confirm funds being credited to your account, you can log onto etrade.com using your logon credentials.
If you purchase shares in the Directed Share Program you will have the option to receive dividends in your account. You may also sell your shares. To receive a distribution of the sale proceeds in your account after your position is fully paid for—meaning, the funds are posted and available in your account—you have the ability to transfer your funds via online transfer, back to the same account you used to submit your original payment.
How can I track the status of the offering?
Visit the Directed Share Program site on etrade.com at any time to check on the status of the company’s offering, including any updates to the anticipated price range, the size of the offering, and key dates.
What happens on the day the initial offering price is set?
After the company’s offering price is announced, you will receive an email from E*TRADE with pricing details and instructions on how to confirm your allocation of shares. If you wish to purchase shares allocated to you by the company through the Directed Share Program, you must confirm your indication of interest via the Directed Share Program site on etrade.com by the stated deadline.
Please keep in mind that you will need to confirm your order in a very short timeframe, which may be less than six hours after receiving the pricing email from E*TRADE. Failure to confirm by the stated deadline will preclude you from participating in the Directed Share Program, and your indication of interest will be canceled. If you have the funds to cover the purchase price in your account, shares will be allocated to you once you confirm your order. *We strongly encourage you to check your email regularly so you can be aware of any updates.
Am I notified when pricing is determined?
Once the offering has priced, you will be notified by email. On the night of pricing, you can periodically check the DSP page in the event of email delays. Pricing may occur any time after 5 PM ET. Regardless of when the deal prices, you will need to confirm your order by the confirmation deadline indicated in your email notification. Note, that you will need to confirm your order in a short timeframe, which may be less than six hours after receiving the pricing email from E*TRADE.
Should I decide to purchase shares through the Directed Share Program, when is payment due?
Payment is due by 4 PM ET on pricing day, which is the day before the Initial Public Offering (IPO). We strongly encourage you to check your email regularly so you can be aware of any updates. To set up payment for your shares, you can fund your brokerage account via an online transfer (“ACH”) or wire transfer. Additional funding instructions can be found in the Transfer Money section of etrade.com.