5 ms·

I love the way all reporting of stocks has to show the stock either 'surging', 'soaring' or 'tumbling', 'crashing'. An IPO priced at $24.00 that sells three day

I love the way all reporting of stocks has to show the stock either 'surging', 'soaring' or 'tumbling', 'crashing'. An IPO priced at $24.00 that sells three days later at $23.77 has not tumbled. Sure, it was relatively volatile in the first few days but that is common on high profile IPO's until the price settles to a market determined level. EDIT: No doubt if it rises to $25.00 tomorrow it will have 'rebounded' and be worth another hyped headline.

drawkbox 10y ago
Not to mention the wider market is actually in a 'tumble' for the last few days, probably in anticipation of the fed rate increase.
slededit 10y ago
If a 12% single day drop doesn't count as a tumble then what would in your definition?
- option_greek 10y ago
  Not to mention list price usually acts as a good floor (unless the IPO was overpriced to begin with).
- encoderer 10y ago
  You have to take it in context of relative volatility. There are products where a 12% move wouldn't be notable. In this case, it's under a week old. This expected volatility is why market makers do not sell options on ipo issues for a little while. These kinds of stories are like basing a climate change story on unseasonably warm weather.
  - beejiu 10y ago
    In other words, people are using the market to determine the valuation rather than using the valuation to determine the market.
    - gcb0 10y ago
      that's how it goes for companies without real profit.
      - ryanfreeborn 10y ago
        At least until after a few 10ks
    - encoderer 10y ago
      This is how the market works. It's crowd sourcing valuations. It's not a bad thing. Do you have a better way to determine the valuation of a complex business?
      - fixermark 10y ago
        Sample over a wider time-window (a quarter, at least, seems reasonable; a year if you really want a sense of the business's pulse). Motion in the stock right now is noise; possibly profitable noise for some people, but there's very little to draw conclusions from in these post-IPO fluctuations.
      - beejiu 10y ago
        The purpose of the market is not to determine valuations, it is to facilitate transactions. The transactions happen at different prices (very close together) - the idea is the market participants (buyers and sellers) have their own ideas about valuation and enter transactions accordingly. All else is speculation.
        JumpCrisscross 10y ago
        > the purpose of the market is not to determine valuations Promoting price discovery [1] is one of the fundamental features and functions of a market. Side note: the line between "speculation" and "investing," where the former refers to short-term shareholding and the latter to a specific set of Graham-Dodd valuation models, is not a general economic term. It only makes sense when discussing Graham-Dodd investment styles, which are a subset of long-term financial investment styles, which are themselves a subset of the market. [1] https://en.m.wikipedia.org/wiki/Price_discovery https://en.m.wikipedia.org/wiki/Price_discovery
- xiaoma 10y ago
  I lost about 50% on my Apple stock in a single day shortly after buying it during the early 2000s. I didn't mean the company's actual business had drastically deteriorated. It just meant that shares I had previously evaluated to be a good purchase were now on sale and it was time to buy more.
ffjffsfr 10y ago
:+1 Facebook IPO set target price to 38$. It went down immediately at extreme point falling down to 18$ a share. It only got back to 38$ after around one year. What is the price now? 137$ Not saying this will happen to Snap, just saying IPO-s usually show similar dynamics.
- codecamper 10y ago
  I'm the biggest loser, having bought $60,000 worth of FB at 18, only to sell it at 19 or 20. Geez O Pete. I couldn't get comfortable with such a big chunk of my net worth in one stock. Not sure if Snap will perform the same miracles as FB however.
  - fab1an 10y ago
    You shouldn't judge decisions purely based on their outcome, and especially not with stocks. If 60k is a significant chunk of your net worth and you don't want to just gamble, it was probably rational to at least sell part of it...
  - mobiplayer 10y ago
    Getting 5-10% extra is a win in my books. You did the right thing at the time, don't sweat it.
    - csomar 10y ago
      Not really. If he bought a volatile stock and sold with only 5% profit, then he didn't make much considering the risks he was taking.
      - tinco 10y ago
        He also did not lose much, considering the risks he was taking..
      - hndamien 10y ago
        There is never a bad time to take a profit.
johnchristopher 10y ago
Stocks are fragile creatures in need of constant monitoring attention.
- Kurtz79 10y ago
  It's funny how the truth is probably the opposite, for the average investor. One should make a buy/sell decision based on a medium/long term evaluation of the company prospects and try to ignore as much as possible the daily ups and downs.
  - pg314 10y ago
    Not only average investors. Lethargy bordering on sloth remains the cornerstone of our investment style: This year we neither bought nor sold a share of five of our six major holdings. -- Warren Buffet in the 1990 letter to the shareholders [1]. [1] http://www.berkshirehathaway.com/letters/1990.html http://www.berkshirehathaway.com/letters/1990.html
jsemrau 10y ago
It's like it was written by the Trump administration.

drawkbox 10y ago

Not to mention the wider market is actually in a 'tumble' for the last few days, probably in anticipation of the fed rate increase.

slededit 10y ago

If a 12% single day drop doesn't count as a tumble then what would in your definition?

option_greek 10y ago
Not to mention list price usually acts as a good floor (unless the IPO was overpriced to begin with).
encoderer 10y ago
You have to take it in context of relative volatility. There are products where a 12% move wouldn't be notable. In this case, it's under a week old. This expected volatility is why market makers do not sell options on ipo issues for a little while. These kinds of stories are like basing a climate change story on unseasonably warm weather.
- beejiu 10y ago
  In other words, people are using the market to determine the valuation rather than using the valuation to determine the market.
  - gcb0 10y ago
    that's how it goes for companies without real profit.
    - ryanfreeborn 10y ago
      At least until after a few 10ks
  - encoderer 10y ago
    This is how the market works. It's crowd sourcing valuations. It's not a bad thing. Do you have a better way to determine the valuation of a complex business?
    - fixermark 10y ago
      Sample over a wider time-window (a quarter, at least, seems reasonable; a year if you really want a sense of the business's pulse). Motion in the stock right now is noise; possibly profitable noise for some people, but there's very little to draw conclusions from in these post-IPO fluctuations.
    - beejiu 10y ago
      The purpose of the market is not to determine valuations, it is to facilitate transactions. The transactions happen at different prices (very close together) - the idea is the market participants (buyers and sellers) have their own ideas about valuation and enter transactions accordingly. All else is speculation.
      - JumpCrisscross 10y ago
        > the purpose of the market is not to determine valuations Promoting price discovery [1] is one of the fundamental features and functions of a market. Side note: the line between "speculation" and "investing," where the former refers to short-term shareholding and the latter to a specific set of Graham-Dodd valuation models, is not a general economic term. It only makes sense when discussing Graham-Dodd investment styles, which are a subset of long-term financial investment styles, which are themselves a subset of the market. [1] https://en.m.wikipedia.org/wiki/Price_discovery https://en.m.wikipedia.org/wiki/Price_discovery
xiaoma 10y ago
I lost about 50% on my Apple stock in a single day shortly after buying it during the early 2000s. I didn't mean the company's actual business had drastically deteriorated. It just meant that shares I had previously evaluated to be a good purchase were now on sale and it was time to buy more.

ffjffsfr 10y ago

:+1 Facebook IPO set target price to 38$. It went down immediately at extreme point falling down to 18$ a share. It only got back to 38$ after around one year. What is the price now? 137$ Not saying this will happen to Snap, just saying IPO-s usually show similar dynamics.

codecamper 10y ago
I'm the biggest loser, having bought $60,000 worth of FB at 18, only to sell it at 19 or 20. Geez O Pete. I couldn't get comfortable with such a big chunk of my net worth in one stock. Not sure if Snap will perform the same miracles as FB however.
- fab1an 10y ago
  You shouldn't judge decisions purely based on their outcome, and especially not with stocks. If 60k is a significant chunk of your net worth and you don't want to just gamble, it was probably rational to at least sell part of it...
- mobiplayer 10y ago
  Getting 5-10% extra is a win in my books. You did the right thing at the time, don't sweat it.
  - csomar 10y ago
    Not really. If he bought a volatile stock and sold with only 5% profit, then he didn't make much considering the risks he was taking.
    - tinco 10y ago
      He also did not lose much, considering the risks he was taking..
    - hndamien 10y ago
      There is never a bad time to take a profit.

johnchristopher 10y ago

Stocks are fragile creatures in need of constant monitoring attention.

Kurtz79 10y ago
It's funny how the truth is probably the opposite, for the average investor. One should make a buy/sell decision based on a medium/long term evaluation of the company prospects and try to ignore as much as possible the daily ups and downs.
- pg314 10y ago
  Not only average investors. Lethargy bordering on sloth remains the cornerstone of our investment style: This year we neither bought nor sold a share of five of our six major holdings. -- Warren Buffet in the 1990 letter to the shareholders [1]. [1] http://www.berkshirehathaway.com/letters/1990.html http://www.berkshirehathaway.com/letters/1990.html

jsemrau 10y ago

It's like it was written by the Trump administration.