As Howard Says ‘Newtek Notes Trading is a Misnomer’

We got a note from long time reader Howard as he vented on the so called ‘trading’ in the new issue Newtek Business Services 7.5% Notes (ticker:NEWTZ).

For all practical purposes there is little ‘trading’ going on in the issue. We show a number of trades in the 1st 90 minutes of the day and then a measly 100 shares traded a couple of hours ago and nothing since that time.

We understand Howards frustration, but I guess we all know how these issues trade—thinly (an understatement I think). In particular this issue, which only has 400,000 shares to begin with, will be worse than most. Most new issues have at least a 1,000,000 shares and some like those from Wells Fargo or Public Storage have 10,000,000.

We wish we had a solution to the problem of securing shares, but like all of our readers all we can do is wait.  We put our best limit order in and it will execute or it won’t.  In the end if we don’t get shares it is ok—irritating, but ok. Other issues will come sooner or later.

Update–use tight limits on this issue as some shares just traded at $26–tooooo high.