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1) IPOs, for the most part, tend to be poor investment choices for indivisual investors if we look the aggregate level
The RATE of IPOs, however, is a great indicator in gauging market sentiment and/or if markets are overpriced
The RATE of IPOs, however, is a great indicator in gauging market sentiment and/or if markets are overpriced
2) IPO prices are typically negotiated between the issuing party, and their investment bank (or banks)
If the market won’t provide a suitable price or favourable financing terms, they won’t go public
IPO prices tend to be in favour of the bank(s) and issuer
If the market won’t provide a suitable price or favourable financing terms, they won’t go public
IPO prices tend to be in favour of the bank(s) and issuer
3) Strong companies tend to go public when the market conditions are right
They may have been waiting during a period of unfavourable market conditions
So the first load of IPOs in a cycle tend to be fairly strong companies
They may have been waiting during a period of unfavourable market conditions
So the first load of IPOs in a cycle tend to be fairly strong companies
4) At this stage, we would not consider the market to be overpriced
5) As the rate of IPOs increases, the watcg out for the quality of the companies going public
Typically, later on in the cycle, weaker companies will pounce on the market’s appetite for IPOs
Typically, later on in the cycle, weaker companies will pounce on the market’s appetite for IPOs
6) This is where we can see companies, still in development, going public
Go look at the rate of new IPOs before the tech bubble, it was over 400 per year in the US alone, thats more than one per day
Go look at the rate of new IPOs before the tech bubble, it was over 400 per year in the US alone, thats more than one per day
7) When you start seeing garbage going public, at an increasing rate, thats one inkling to the investor, that markets may be overpriced
If terms are favourable and demand is hot for new securities, companies will take advantage
If terms are favourable and demand is hot for new securities, companies will take advantage
8) I am not saying i see this right now, but companies like Nikola $NKLA , which is basically a business plan gone public are interesting observations to me
9) Just an observation of historic tendancies relating to the frequency of IPOs in US markets
Have a great evening
IT
Have a great evening
IT
