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Sean HymanSean Hyman
Keymaster
Post count: 3292

Warren Buffett got in PRE-IPO. You’d be getting in POST-IPO. BIG difference.

ALL IPOs are speculations, for starters. They’re generally young start-ups with very little history and very little in earnings. 2) They’re almost always overvalued right from the start. Why? Because if the underwriters are worth their salt, they get THE MOST money for themselves AND the corporate owners because that’s when the owners get their cash infusion, in the IPO stage. Therefore, the stock should be “fully priced” to “overvalued”, taking advantage of investor optimism and excitement over it. So it’s why I’ll never suggest an IPO. And some IPO’s will go up and some will crash hard. And you’ll never know ahead of time which it will do. But the ones who truly make more money in IPOs are the institutions that get in BEFORE the IPO stage. Not when everyone else gets in AT or AFTER the IPO phase. Those are the ones paying, for sure, way too much for the company’s shares.

Hope that helps.