To flip, or not to flip...

The latest crop of biotech IPOs on NASDAQ is getting internet-like pops in their first few days of trading. Six of the 13 NASDAQ-listed deals this month have traded up 50 percent or more in their first day of trading. While bankers are trying to place the shares in long-term hands, the short-term gains could bait even the most dedicated biotech investor to flip the stocks (see "The lure of paper profits").

Chase H&Q banker Vivek Jain is keeping a close eye on whether the new IPO buyers are flipping. With biotech such a hot space and IPOs being several times oversubscribed, there are new faces in the road-show crowd. That's making it more challenging for investment bankers to identify who's a long-term buyer and who's a flipper, according to Jain. "It's a struggle determining who's real and who's not," he said. "Now we're seeing who's in some of these IPOs 45 days later, and it's a totally different group of names."...