Why I never buy an #IPO
$SNOW, $PLTR, $NCNO, $AMWL, $SUMO, $U, $GDRX etc.

A thread. https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">

I wait for at least 2 quarterly results, preferably more, but normally at least 8 or 9 months after the IPO. There are several reasons for that. (1/12) https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
FOMO. A lot of investors don& #39;t want to miss the next & #39;hot& #39; stock but fear of missing out is not the best investing principle. You buy a stock not because the company executes so well or because you are impressed by the conference calls but simply to follow the herd (2/12)https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
As human beings, we are susceptible to social proof. If so many pundits are upbeat about it, it must be a good investment, right? Wait and you can see in the company& #39;s results. You can judge for yourself then instead of blindly believing others. (3/12)https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
The hype machine: banks underwrite themselves and for their most important clients. If shares jump 100% they pocket the difference. There& #39;s also underwriting spreads of, typically, 7% Banks profit in all sort of ways, as you can read here:
http://blogs.reuters.com/felix-salmon/2013/03/11/where-banks-really-make-money-on-ipos/">https://blogs.reuters.com/felix-sal... (4/12)https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
Where banks really make money on IPOs

Every time an IPO has a big pop on its opening day, the same tired debate gets reprised: did the investment banks leading the deal rip off the company raising equity capital?

http://blogs.reuters.com/felix-salmon/2013/03/11/where-banks-really-make-money-on-ipos/
That& #39;s why banks will do everything in their power to push everyone in the industry to hype stocks before the IPO.

And you know how it goes in a business where everybody knows everybody: most will simply do what they& #39;re expected to do and will contribute to the hype. (5/12)https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
Very important: I want to see how a company executes under the public eye for at least a few quarters.

Public scrutiny is different than operating as a private company. The expectations come from outside now and missing earnings paints a whole different picture. (6/12 ) https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
The lock-up period: After 6 months (mostly) the lock-up period expires so insiders can sell as many shares as they want. Management and early investors often seek to cash out at least a part of their holdings and that means that millions of shares flood the market. (7/12 )https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
The lock-up expiration after the #IPO often causes price drops, so there& #39;s time to buy between month 6&12. Plenty of examples here. Let& #39;s take the best #potentialmultibagger, up 1,100% since I picked it in May 2017, $SHOP. This is the price action in the first 6 months: (8/12 )https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
And this is $SHOP& #39;s price between months 6 & 12 after the IPO. It perfectly follows the pattern of a lot of stocks between months 6 and 12 after IPO. (9/12)https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
Another example? Let& #39;s take another #potentialmultibagger. $LVGO IPO& #39;ed on July 25, 2019, and you& #39;d have a great return if you started investing then, up 224%: (10/12) https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
If you waited 6 months, as I did before I selected $LVGO as a Potential Multibagger, you& #39;d be up ~ 400%.
$SHOP and $LVGO are just 2 examples but check more yourself and you& #39;ll see the pattern after probably 90% of the IPOs. (11/12) https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
Conclusion of this thread: don& #39;t get hyped in the #IPO of $SNOW, $U, $PLTR $AMWL, $GDRX etc.
There& #39;s plenty of time to get in later and you& #39;ll have more data to judge on.

The S-1 holds good information, but top execution as a public company beats that. End of thread. (12/12)
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