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IPO Duds
#1
Wow the IPO market has been horrible the last 6 months. I know some of you bought a few names like CHWY, LYFT and UBER.

My question is do you still own the names and are you buying more?

None of these companies make a profit and haven't since they have been in business. Its a risky bet to own these names. No?

Comments.....
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#2
(11-12-2019, 03:57 PM)stockguru Wrote: Wow the IPO market has been horrible the last 6 months. I know some of you bought a few names like CHWY, LYFT and UBER.

My question is do you still own the names and are you buying more?

None of these companies make a profit and haven't since they have been in business. Its a risky bet to own these names. No?

Comments.....

Of those three, I have a small starter position in CHWY, based solely on the endless stream of Chewy boxes that arrive at our doorstep. It is unsurprisingly in the red, given that the stock is near all-time lows since IPO. Credit Suisse upgraded them yesterday with a $29 price target, and projects that they will be profitable by 2022. 

Pet supplies are pretty recession-resistant (was a growth sector even during the Great Recession). The company also has pretty loyal clientele. We'll see if the business can get profitable.
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#3
Sold LYFT at $48 when I saw how poorly the business (along with UBER) was doing.

Not sure how either are ever going to make much in actual profits.
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#4
I stay away from the IPO market unless its a company with great prospects and are actually making a profit. I think the last IPO I bought was Alphabet. So its been a while lol.

My wife and I order from Chewy all the time, but don't own the stock. I may take a look at it of it should fall to $15 range. Analyst upgrades means nothing in this day and age.

I agree UBER and LYFT may never make a profit.
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#5
Also, we really don't have enough data to evaluate the success of recent IPOs. FB took over a year to get back to its IPO price, and is up 500% since then, far outperforming the S&P 500.
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#6
This is also not a group of investors likely to be heavily playing the IPO space. More than 90% of my holdings pay a dividend, and the vast majority of those have a healthy multi-year track record of paying and raising their dividends.

IPOs can be fun for gambling, though. The only one on the horizon that I intend to jump on is Airbnb, once they finally get around to it.
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#7
IPO's are a crap shoot especially in the short term and the then you have the lockup expiration. You cant really evaluate them unless its 2- 3 years out. UBER and CHWY could do well over the long haul. We could all be sitting here wishing we bought at these 52 week lows lol. You just never know. And like most I don't dabble in these stocks since they don't pay a dividend.

However I have been watching PINS and just like Otter will keep a close eye on Airbnb.
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#8
Also, who would have guessed that, of all the IPOs this year, BYND would be one of the big winners so far. Still up 60+% since IPO day, despite the massive decline from $235 to $78.

IPOs are voodoo economics. Big Grin
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#9
Other than BYND, I don't think any of those mentioned here are investable businesses. Not enough there, there.
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#10
(11-12-2019, 05:48 PM)NilesMike Wrote: Other than BYND, I don't think any of those mentioned here are investable businesses. Not enough there, there.

Uber is going to be a real test of whether the network effect is enough to be profitable in ridesharing. Can they slowly boil their frogs in the pot and raise fares to the point of profitability, without losing too much market share to other apps? If they can't do it, I don't think anyone can make the business model work until something changes (like driverless cars).
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