IPO Duds

[vbin]

NIO: I invested in it, pulled out when I recobered my money. Who knew it will fly like this. So a dud might not stay dud. Never the less IPOs are more risky.

PLTR: I invested in PLTR purely becouse I believe they have an advantage based on their business model and what they have to offer.

UBER: I bought based on reasons I don't want to disclose and I was lucky to not loose money and make some money. And I am out of it now mostly.

Other IPOs that I am looking at: Databricks, this is going to fly of it doesn't go the snowflake route. Airbnb, robinhood.

In a hindsight, I missed out on multiple baggers by not buying the IPOs just becouse they were expensive even though I beleived in the tech and business.

[fenders53]

(11-20-2020, 01:35 PM)vbin Wrote: NIO: I invested in it, pulled out when I recobered my money. Who knew it will fly like this. So a dud might not stay dud. Never the less IPOs are more risky.

PLTR: I invested in PLTR purely becouse I believe they have an advantage based on their business model and what they have to offer.

UBER: I bought based on reasons I don't want to disclose and I was lucky to not loose money and make some money. And I am out of it now mostly.

Other IPOs that I am looking at: Databricks, this is going to fly of it doesn't go the snowflake route. Airbnb, robinhood.

In a hindsight,  I  missed out on multiple baggers by not buying the IPOs just becouse they were expensive even though I beleived in the tech and business.

It's human nature to remember the big fish that got away. IPOs are in fact risky.  How many beating did you miss by not buying?  I intend to start investing in more of them.  AIRB is on my list.  So here is my IPO plan.

1. The narrative has to be good, and LASTING.  Is a future MOAT even a possibility?  I thought Uber was a joke at the price. BYND was a novel idea I thought.  But you can't patent fake meat.  If it gets popular you won't gouge MCD for long.  Valuations are tough to calculate initially for a disruptive new tech, but in the end valuation will matter.  If you pay 500% the IPO price you are probably just MOMO gambling.

2.  If you pick a decent IPO the share price will pop.  Take some of your investment off the table if you get the opportunity and invest in another IPO.  There will be more losers than winners over time.  Far more.  But what if you accidentally sell off half your AAPL or AMZN IPO?   Such is life, you still made so much money it doesn't even matter if you left half of it on the table.      

I need to buy more IPOs. 

[vbin]

(11-20-2020, 02:01 PM)fenders53 Wrote:

(11-20-2020, 01:35 PM)vbin Wrote: NIO: I invested in it, pulled out when I recobered my money. Who knew it will fly like this. So a dud might not stay dud. Never the less IPOs are more risky.

PLTR: I invested in PLTR purely becouse I believe they have an advantage based on their business model and what they have to offer.

UBER: I bought based on reasons I don't want to disclose and I was lucky to not loose money and make some money. And I am out of it now mostly.

Other IPOs that I am looking at: Databricks, this is going to fly of it doesn't go the snowflake route. Airbnb, robinhood.

In a hindsight,  I  missed out on multiple baggers by not buying the IPOs just becouse they were expensive even though I beleived in the tech and business.

It's human nature to remember the big fish that got away. IPOs are in fact risky.  How many beating did you miss by not buying?  I intend to start investing in more of them.  AIRB is on my list.  So here is my IPO plan.

1. The narrative has to be good, and LASTING.  Is a future MOAT even a possibility?  I thought Uber was a joke at the price. BYND was a novel idea I thought.  But you can't patent fake meat.  If it gets popular you won't gouge MCD for long.  Valuations are tough to calculate initially for a disruptive new tech, but in the end valuation will matter.  If you pay 500% the IPO price you are probably just MOMO gambling.

2.  If you pick a decent IPO the share price will pop.  Take some of your investment off the table if you get the opportunity and invest in another IPO.  There will be more losers than winners over time.  Far more.  But what if you accidentally sell off half your AAPL or AMZN IPO?   Such is life, you still made so much money it doesn't even matter if you left half of it on the table.      

I need to buy more IPOs. 

I missed more than I want to remember and this is despite being in the middle of the action and knowing that these companies will do well. Simply becouse of valuation. Need to change that nerrative and not be a dear stairing in headlights. Going to put money in companies I believe and close my eyes. Those are the 3 names I have on my list as of now. PayTM in India is another one which is going to be a rocketship but no way yet for me to invest there.

[fenders53]

(11-20-2020, 02:28 PM)vbin Wrote:

(11-20-2020, 02:01 PM)fenders53 Wrote:

(11-20-2020, 01:35 PM)vbin Wrote: NIO: I invested in it, pulled out when I recobered my money. Who knew it will fly like this. So a dud might not stay dud. Never the less IPOs are more risky.

PLTR: I invested in PLTR purely becouse I believe they have an advantage based on their business model and what they have to offer.

UBER: I bought based on reasons I don't want to disclose and I was lucky to not loose money and make some money. And I am out of it now mostly.

Other IPOs that I am looking at: Databricks, this is going to fly of it doesn't go the snowflake route. Airbnb, robinhood.

In a hindsight,  I  missed out on multiple baggers by not buying the IPOs just becouse they were expensive even though I beleived in the tech and business.

It's human nature to remember the big fish that got away. IPOs are in fact risky.  How many beating did you miss by not buying?  I intend to start investing in more of them.  AIRB is on my list.  So here is my IPO plan.

1. The narrative has to be good, and LASTING.  Is a future MOAT even a possibility?  I thought Uber was a joke at the price.  BYND was a novel idea I thought.  But you can't patent fake meat.  If it gets popular you won't gouge MCD for long.  Valuations are tough to calculate initially for a disruptive new tech, but in the end valuation will matter.  If you pay 500% the IPO price you are probably just MOMO gambling.

2.  If you pick a decent IPO the share price will pop.  Take some of your investment off the table if you get the opportunity and invest in another IPO.  There will be more losers than winners over time.  Far more.  But what if you accidentally sell off half your AAPL or AMZN IPO?   Such is life, you still made so much money it doesn't even matter if you left half of it on the table.      

I need to buy more IPOs. 

I missed more than I want to remember and this is despite being in the middle of the action and knowing that these companies will do well. Simply becouse of valuation. Need to change that nerrative and not be a dear stairing in headlights. Going to put money in companies I believe and close my eyes. Those are the 3 names I have on my list as of now. PayTM in India is another one which is going to be a rocketship but no way yet for me to invest there.

I was just discussing with a friend the other day that I would like just a little Indian exposure.  Seems like a no brainer for the next decade.  Not saying we dump China, but I think we are going to diversify soon.  Stable generally peaceful government, and every Indian I meet has a very good work ethic and above average intelligence.  They are going to succeed.

[crimsonghost747]

I never really liked the idea of investing in IPOs. It's risky since you don't really have all the necessary information yet.
And like most of us here, I'm in this for decades so I tend to favor the more stable companies since a proper DGI portfolio WILL get me where I want to be eventually. Sure, it would be faster if I could find some IPOs that pop 1000% in a week.

But I have invested in HYLN and U.
HYLN because I believe they have a good concept and a CEO who can make it into reality. Competition is going to be fierce but I think they have a shot. I have quite a large position, some (or all) of which I will sell on the way up. (if that is the direction it goes to)

U because it's essentially a duopoly when it comes to gaming. Plus all the other potential uses for U. This I plan to keep for a long time.

[NilesMike]

The only way that I've had success with IPOs is to wait 6 months and take the breakout/breakdown (if shortable) of the first 6 month range.

I just keep a watch list of new IPOs with lines marked on the chart.

[fenders53]

(11-21-2020, 09:54 AM)NilesMike Wrote: The only way that I've had success with IPOs is to wait 6 months and take the breakout/breakdown (if shortable) of the first 6 month range.

I just keep a watch list of new IPOs with lines marked on the chart.

It would be hard to argue against that strategy.  Most of them fall back to what they traded at during the first week, if not sub-IPO price.  By now you've seen at least one earnings report and the insider lockup period is over.  I can't think of a single truly successful company where buying months late mattered.  AMZN, AAPL, MSFT, they all sold cheap years after IPO.

It comes back to VBIN's point.  You are scared of valuation during the early years because the math just doesn't add up yet.  I think that I am smart enough to weed out 50% of them because I don't buy the longterm narrative.  No moat blah, blah, blah.  I'm sure I would have scoffed at the Heinz Ketchup IPO if it looked expensive at the time.

[vbin]

(11-21-2020, 03:46 AM)crimsonghost747 Wrote: I never really liked the idea of investing in IPOs. It's risky since you don't really have all the necessary information yet.
And like most of us here, I'm in this for decades so I tend to favor the more stable companies since a proper DGI portfolio WILL get me where I want to be eventually. Sure, it would be faster if I could find some IPOs that pop 1000% in a week.

But I have invested in HYLN and U.
HYLN because I believe they have a good concept and a CEO who can make it into reality. Competition is going to be fierce but I think they have a shot. I have quite a large position, some (or all) of which I will sell on the way up. (if that is the direction it goes to)

U because it's essentially a duopoly when it comes to gaming. Plus all the other potential uses for U. This I plan to keep for a long time.

What's the other company with U in duopoly? I have heard that before. I am not into gaming. But I can see the way world is going, gaming is going to get bigger and better. Stadia( Google's cloud gaming platform just sent me a $100 worth controllers for free t promote their platform. Tried it, good business model they have).

U makes gaming engine the way I understand, why valuation is so high? Just hype or they have an advantage?

[crimsonghost747]

(11-21-2020, 11:59 AM)vbin Wrote:

(11-21-2020, 03:46 AM)crimsonghost747 Wrote: I never really liked the idea of investing in IPOs. It's risky since you don't really have all the necessary information yet.
And like most of us here, I'm in this for decades so I tend to favor the more stable companies since a proper DGI portfolio WILL get me where I want to be eventually. Sure, it would be faster if I could find some IPOs that pop 1000% in a week.

But I have invested in HYLN and U.
HYLN because I believe they have a good concept and a CEO who can make it into reality. Competition is going to be fierce but I think they have a shot. I have quite a large position, some (or all) of which I will sell on the way up. (if that is the direction it goes to)

U because it's essentially a duopoly when it comes to gaming. Plus all the other potential uses for U. This I plan to keep for a long time.

What's the other company with U in duopoly? I have heard that before. I am not into gaming. But I can see the way world is going, gaming is going to get bigger and better. Stadia( Google's cloud gaming platform just sent me a $100 worth controllers for free t promote their platform. Tried it, good business model they have).

U makes gaming engine the way I understand, why valuation is so high? Just hype or they have an advantage?

Indeed, the main product of U is the unity game engine.
While there are many game engines around, it's pretty much a choice between Unity and Unreal Engine (by Epic games) for everyone who is not a big independent studio with millions of dollars of funding. These two have all the features you need and attractive pricing models which allow you to basically start your project without paying anything for the engine. (the developer starts paying when they start earning revenue)

The moat here is massive. Developing a game engine is an extremely time and resource consuming effort. We are talking several years of work by a full sized development team... at a minimum. Most (or all?) of the other fancy game engines apart from Unity and Unreal are ones that the big studios have developed for themselves and are keeping for their own use. 

That is for the game engine part. Of course there are other uses for Unity too but I don't really understand the advantages/competition on that side. I'm in this since I view Unity & UE having essentially a duopoly in game engines and as such they will both benefit significantly from the money that is flowing into the gaming sector as a whole.

There is most likely quite a bit of hype in the price but that seems to be the default for any tech stock in this market. I'm horrible when it comes to estimating any sort of value for companies like this, they are high growth and currently not profitable. So I really can't say if the valuation is crazy or not, I just like their business plan.

[vbin]

(11-22-2020, 12:37 AM)crimsonghost747 Wrote:

(11-21-2020, 11:59 AM)vbin Wrote:

(11-21-2020, 03:46 AM)crimsonghost747 Wrote: I never really liked the idea of investing in IPOs. It's risky since you don't really have all the necessary information yet.
And like most of us here, I'm in this for decades so I tend to favor the more stable companies since a proper DGI portfolio WILL get me where I want to be eventually. Sure, it would be faster if I could find some IPOs that pop 1000% in a week.

But I have invested in HYLN and U.
HYLN because I believe they have a good concept and a CEO who can make it into reality. Competition is going to be fierce but I think they have a shot. I have quite a large position, some (or all) of which I will sell on the way up. (if that is the direction it goes to)

U because it's essentially a duopoly when it comes to gaming. Plus all the other potential uses for U. This I plan to keep for a long time.

What's the other company with U in duopoly? I have heard that before. I am not into gaming. But I can see the way world is going, gaming is going to get bigger and better. Stadia( Google's cloud gaming platform just sent me a $100 worth controllers for free t promote their platform. Tried it, good business model they have).

U makes gaming engine the way I understand, why valuation is so high? Just hype or they have an advantage?

Indeed, the main product of U is the unity game engine.
While there are many game engines around, it's pretty much a choice between Unity and Unreal Engine (by Epic games) for everyone who is not a big independent studio with millions of dollars of funding. These two have all the features you need and attractive pricing models which allow you to basically start your project without paying anything for the engine. (the developer starts paying when they start earning revenue)

The moat here is massive. Developing a game engine is an extremely time and resource consuming effort. We are talking several years of work by a full sized development team... at a minimum. Most (or all?) of the other fancy game engines apart from Unity and Unreal are ones that the big studios have developed for themselves and are keeping for their own use. 

That is for the game engine part. Of course there are other uses for Unity too but I don't really understand the advantages/competition on that side. I'm in this since I view Unity & UE having essentially a duopoly in game engines and as such they will both benefit significantly from the money that is flowing into the gaming sector as a whole.

There is most likely quite a bit of hype in the price but that seems to be the default for any tech stock in this market. I'm horrible when it comes to estimating any sort of value for companies like this, they are high growth and currently not profitable. So I really can't say if the valuation is crazy or not, I just like their business plan.

great analogy. What other sector U is trying to get into(movies? Anime?). The way I understand gaming is that with gaming is you need a lot of capex to create new games(graphics, coding, algos, marketing) and yet a new game can go either way. Its always a big shot. Almost like creating a new movie at high budget. How does U solves these problems?

[crimsonghost747]

You don't necessarily need a lot of CAPEX. The big studios use a lot of money, but it's not necessary. There are a gazillion great games that have been made by a small group of people using their own free time. Or small studios only employing a few people. And almost all of these kind of projects are on Unity or Unreal, since they offer a great game engine in exchange for a cut in revenue.

I won't go into the game development details here as it's a pretty huge and complicated thing. Let's just say that for your regular dudes who wish to make a game without spending huge amount of money, you need to use a game engine instead of making one yourself. The large majority pick either Unity or Unreal since they are considered the best. They are free to start with, they have very good features and they are very flexible so they work well whether you want to create a fancy 3d first-person shooter for PC and/or the newest consoles or a simple building game for mobile devices.