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Any “deeply unprofitable” company that goes public without at least any bright future forecast will get their share price hammered right after the IPO, or would

by tacker2000 2y ago

Any “deeply unprofitable” company that goes public without at least any bright future forecast will get their share price hammered right after the IPO, or would probably cancel the IPO since the underwritten target IPO price would be too low. This has happened. There is no “conspiracy” cheat code here, the reason they went public is to satisfy their pre IPO VC investors. The snowball just continues roll at that point. They had over $1B of total investments prior to their IPO so the pressure to go public was clear. If you look at their share price, they held at around $40 for about 4 months, after which there was a sharp drop, see: https://www.fool.com/investing/2023/08/09/why-23andme-holding-stock-plummeted-by-13-today/ https://www.fool.com/investing/2023/08/09/why-23andme-holdin...

rchaud 2y ago
If SPACs aren't a money cheat code, what are they? A real company puts out an S-1 to gauge market sentiment, and doesn't hide them behind a Richard Branson investment vehicle. > 23andMe isn’t doing a traditional IPO, but rather following the popular trend of using a SPAC (Special Purpose Acquisition Company), a blank-check company formed solely for the purpose of raising capital through an initial public offering, in this case run by Virgin founder and billionaire Richard Branson. https://finance.yahoo.com/news/23-and-me-to-go-public-at-35-billion-with-sir-richard-bransons-spac-145723271.html https://finance.yahoo.com/news/23-and-me-to-go-public-at-35-...