3 ms·
So are you saying it is worth investing in unprofitable companies (at IPO time) because the market will force the company to improve it's profitability going fo
by eecks 6y ago
So are you saying it is worth investing in unprofitable companies (at IPO time) because the market will force the company to improve it's profitability going forward?
- rchaud 6y agoI am saying almost the opposite, actually. The time to invest in an IPO stock is before it goes public, not after. IPOs are priced to extract the maximum possible capital, partly why the prices usually dive within the first trading day. Buying on the secondary market (NYSE/NASDAQ)is putting money in the pockets of the investment bank that underwrote the issue. Of course once a company has been public for a while and there is sufficient public information about their performance, you can choose to go the value investing path.