There are plenty of opportunities to benefit from your "SUPER BULLISH" case on whatever the stock is... but day one being it has a horrible track record. IPOs are not done to make YOU wealthy!!! Including today's NASDAQ:ABNB
My video is not all FUD. I show a simple way to play them with a better chance...
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I had a GREAT COMMENT asking about how to look at IPOs that did "work" this year. In most cases buying the *day of* is not the best entry. I explain in the video a SIMPLE WAY to play them...
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New video with detailed strategy for playing IPOs smarter, simpler and safer...
strong disagree - only anecdotal cherry picked examples of overvalued companies; for tons and tons of smaller companies going public buying the print in an IPO is a great decision. Like anything else, a buy requires an assessment of value and growth - that may exist on IPO day. There's nothing magical about this. I get what you're saying for the average retail investor buying into these overcooked ipo's but if they can't do enough research to assess whether or not a stock is a fair investment at a given price then they should be invested in index funds instead. In other words, buying IPO's isn't stupid, buying stocks without doing a modicum of research is stupid. IPO's are just easy to pick on because there have been a few high profile stretched valuations
norok
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@Pholesolus, By your well thought comment you put yourself in the minority. Most people don't do a modicum of research... they play hype. This warning is for them.
You both have fair points. Average retail consumers do not always consider market variables, industry variables, read investor reports, or look at a particular companies leadership team or current operational capabilities. Looking at these various datapoints along with "hype", it's easier to make a determination of value and therefore, an assessment of whether something or over or undervalued. But, this is surprisingly (and not so surprisingly, in some respects) not a level of due diligence that most investors make. Both are fair points
@Pholesolus, Massive public interest does indeed drive stock prices higher. Just look at BYND or TSLA. I remember my 60 yo professor back in 2012 telling us it would be foolish to buy into the FB IPO. I believed him.
If your priority is the balance sheet, buy Japanese stocks. MSBHF is selling at great value right now, which is why Warren Buffett bought a bunch. However, MSBHF may remain stagnant for years.
AmericanPsycho
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@SugarMuffin, I remember the FB IPO well. Opened at ~$38, immediately shot up to mid/upper $40's, and then slowly slid to $19 within six months. I distinctly remember seeing it at $19 a few months later and feeling so grateful I didn't buy into the hype and lose 50% of my money. Most of my friends who bought on day one ended up selling at a loss at some point during the next several months. A year later, it found its way back to the IPO price. And of course now it's one of the most valuable companies on Earth.
In short, your professor was right* -- initially anyway. The IPO was a veritable fleecing of the retail investor.
Just a trip down memory lane... nothing more. Cheers.
scheplick
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@Pholesolus, It's a great point.
I am divided here. Because I do agree with a lot of what you said.
At the same time I did really like @norok points of waiting. And I kind of get that as well. Is it really going to suddenly take off and never return to its IPO price again? Very few IPOs do that. There's always enough time to reassess or watch it come back and re-test certain levels.