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The frenzy is causing first-day pops, creating headaches for investment banks and attracting scrutiny from regulators who worry that mom-and-pop speculators will end up getting burned. Behind it all is an intense competition among local brokers to offer what looks to some like an irresistible deal — margin loans with interest rates as low as 0%.
“I am a millionaire for seven days — I know it’s just on paper, but it’s cool,” said Gareth Chan, who is in his 30s and has been buying into IPOs since 2019. The way Chan, who works in a back office function for a conglomerate, sees it, there’s virtually no risk to the wagers if he sells within the first few minutes of trading.
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