IPOs: Good investment or not? - Ahwatukee Foothills News: Money

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

IPOs: Good investment or not?

Print
Font Size:
Default font size
Larger font size

Cynthia Fick

Related Stories

Posted: Tuesday, May 1, 2012 2:04 pm

The company that makes your favorite product is about to offer stock shares to the public for the first time. This privately held company is now ready to go public with an Initial Public Offering (IPO). IPOs are an important cog in the economy. They nurture sound business ideas, generate employment, help market competition, and can generate wealth for investors. But not every IPO realizes this goal. You’re really excited, but should you invest?

What you should know

• An infusion of capital and a surge of growth alone won’t ensure any company’s success.

• There’s not a lot of public record information to draw from, so you won’t have operational history to help you decide.

• The prospectus provides information, but its purpose is to market the offer to the public.

• At least one study of average IPO performance showed returns of 67 percent less than the S&P 500 Index in the first five years.

What you should do

• Examine the prospectus for solid indicators of the viability of the business, its timing to market, the state of its industry, competitors, and competitive advantage.

• Look closely at what the prospectus tells you about the company’s management team and board of directors. Is there a record of integrity as well as experience among members?

• Find out which underwriters, if any, are involved in the offer. This does not guarantee a good investment, but their association may speak to the quality of the offer.

• Decide your entry (and exit) strategy with a trusted financial advisor and stick to your plan.

My best advice: IPOs are best avoided by individual investors, unless using a small amount of “play money” from your portfolio. Be clear-headed before you proceed. Look for a reasonably priced offering with a sound business model and signs of potential success.

Cynthia K. Fick is founder of Financial Life Planners LLC in Ahwatukee. Reach her at (480) 346-4073 or ckfick@cox.net.

More about

More about

  • Discuss

Reuters - Timeline

See more of Reuters by logging into FacebookMessage this Page, learn about upcoming events and more. If you don't have a Facebook account, you…

Published: August 27, 2016 - 2:34 pm @ https://www.facebook.com/Reuters/videos/1210519652301722/

Beef Vegan Leaving KWSS for Tucson Radio Station KFMA

David Accomazzo A A A longtime voice of and advocate for the local music scene, KWSS morning show host Brad Pfirrman, aka Beef Vegan, is leavi…

Published: August 27, 2016 - 2:35 pm @ http://www.phoenixnewtimes.com/music/beef-vegan-le…

Chicago pokes fun at couple who moved to city, left after 1 day

Brianna Joy and Jaelin White, both 18, posted the now-viral video to their YouTube channel earlier this month called "The Reason We're Homeles…

Published: August 27, 2016 - 2:06 pm @ http://abc7chicago.com/society/chicago-pokes-fun-a…


Far-reaching tribal solidarity displayed at pipeline protest

NEAR THE STANDING ROCK SIOUX RESERVATION, N.D. — Native Americans from reservations hundreds of miles away from North Dakota have joined the S…

Published: August 27, 2016 - 1:42 pm @ https://www.washingtonpost.com/national/far-reachi…

Polls: Tight in NC while Trump tops in AZ

Donald Trump is the choice of 43% of registered voters in Arizona, while Clinton stands at 38% In North Carolina, Clinton stands at 44%, Trump…

Published: August 27, 2016 - 1:03 pm @ http://www.cnn.com/2016/08/24/politics/arizona-nor…

What You Need to Know About Denver Go Topless Day (NSFW)

Michael Roberts A A Tomorrow, August 26, marks the 95th anniversary of what most historians see as the signature victory of the women's suffra…

Published: August 27, 2016 - 12:15 pm @ http://www.westword.com/news/what-you-need-to-know…

5 Amazing Things About the Minnesota Vikings' New Stadium

The Minnesota Vikings on Sunday host the San Diego Chargers on Sunday for the inaugural football game in U.S. Bank Stadium, which cost $1.13 b…

Published: August 27, 2016 - 12:04 pm @ http://fortune.com/2016/08/27/nfl-minnesota-viking…

Why Syria's war, after 400,000 deaths, is only getting worse

Driving in Canada Canada - a home away from home Canada, it's time to change! Living with a disability in Indo-Canadian society The empire str…

Published: August 27, 2016 - 12:03 pm @ http://timesofindia.indiatimes.com/world/middle-ea…

The Democrats are failing Obamacare

On May 20, about a month after UnitedHealthcare, one of the country’s major health insurers, announced that it would pull out of Arizona’s exc…

Published: August 27, 2016 - 11:03 am @ http://www.businessinsider.com/the-democrats-are-f…

Facebook

ahwatukee.com on Facebook

Twitter

ahwatukee.com on Twitter

RSS

Subscribe to ahwatukee.com via RSS

RSS Feeds

Spacer4px

Most Popular

Online poll

Loading…