IPO Process

• A company sells a limited number of shares in an IPO -- just enough to create a market in its stock and generate sufficient demand. It hires an underwriter -- an investment banker -- to guide it through the process and solicit indications of interest from potential investors. Technically, an investor can express a desire to buy just one share in an IPO, but in reality this never happens.
  
  

Stock Allocation

• In most instances, the demand from potential investors far exceeds the supply of available stock so the underwriter allocates the shares according to its priorities. The underwriter's best clients and institutions usually get the shares -- a retail investor who wishes to buy just one share is not likely to be at the top of the priority list. But even if you express a desire to buy a substantial number of shares, you are not likely to get any, so how much money you need to buy an IPO is a moot point.
  
  

Buying in the Open Market

• Since most retail investors cannot get shares in an IPO allocation, their only option is to buy in the open market when the stock starts trading. In that respect how much you put into a stock is up to you and depends on your risk tolerance and resources. The only possible benchmark to consider here is the trading commissions. Most online brokers charge such small commissions that the cost of trading is often negligible in calculating your returns, but the smaller the dollar amount you put into a stock, the larger the proportion of your investment that goes to broker commissions. If your broker charges $10 on a trade order, a roundtrip (buy and sell) commission will amount to $20. If you buy just one share of stock at $20, the stock must double for you to break even after the $20 commission.
  
  

Minimum Opening Balance

• If you are new to investing and want to open a brokerage account to buy a particular IPO in the open market, the only limitation is your broker's minimum opening balance requirement. Most brokers want to see at least $2,000, although some may have lower minimums.