Can You Buy Quora Stock and How Likely is an IPO?

Many individuals are curious about the possibility of purchasing Quora stock and whether or not the company will eventually go through an Initial Public Offering (IPO). Here's a detailed guide on how one might try to buy Quora stock and the current likelihood of a potential IPO.

Is It Possible to Buy Quora Stock?

The short answer is that buying Quora stock isn’t as straightforward as buying shares of a publicly traded company. The vast majority of the company's stock is held by specific groups, such as institutional investors, founders, and employees with vested options. In this section, we'll explore the various hurdles one would face in trying to purchase Quora stock.

Find an Owner of Quora Shares

To actually buy stock in Quora, you would need to find someone who owns shares. This might include institutional investors, founders, or employees who have exercised their options. Employee stock options are often tied to various conditions, such as vesting schedules and restrictions on reselling or donating the shares.

In most cases, these shares are registered in a stock ledger with a custodian, making physical stock certificates nearly impossible to obtain. Therefore, finding a certificate is almost impossible.

Clear the Restrictions on the Shares

The terms of employee stock options often include clauses that prohibit the resale of shares, require the company to have first rights to repurchase shares, and give other shareholders the right to buy those shares. If the company's terms are not met, the stock cannot be legally transferred. Compliance with these terms is essential and crucial for any potential transfer.

Be an Accredited Investor

Even if you find a way to get around the terms, you would need to be an accredited investor. This means you must have a net worth of over $1 million (not including your primary residence) or annual income of over $200,000 for the past two years and a reasonable expectation of the same for the current year. If you do not meet these standards, the company is likely to not approve the transfer of the shares, for reasons of regulatory adherence and risk management.

Get the Company to Agree to the Transfer

Finally, even if all the above conditions are met, the company itself must agree to the transfer. This requirement is in addition to the terms that other potential buyers might face. Negotiating this clause with a private company can be extremely difficult and time-consuming.

Best Bet for Participating in the IPO Upside

Much difficulty aside, if you still hope to benefit from the potential value increase of Quora through an IPO, and you are not an accredited investor, one common strategy is to find an employee willing to write a covered call option. In this arrangement, you'd pay the stockowner an option premium now in exchange for the right to buy the stock at a certain future date at a specified price.

However, it is important to note that this transaction is technically illegal as it involves selling restricted securities in an off-book transaction. This approach should be approached with caution, as it carries risks and potential legal liabilities. Moreover, the transaction is subject to the terms and conditions of the covered call option agreement, and acquiring title of the stock would depend on the exercise of the option.

Conclusion

Buying Quora stock directly is a complex and challenging process, filled with numerous hurdles. As for the likelihood of an IPO, the exact timing and possibilities are less certain. If you are not an accredited investor and do not have connections within the company, it may be more difficult to participate in the benefits of a Quora IPO. Nevertheless, staying informed and networked might provide opportunities that could be beneficial.