A relevant note from Eureka Report this morning: When to buy the...

A relevant note from Eureka Report this morning:

When to buy the unicorns
Eventually, however, these companies (disruptive companies in IPO stage) will need additional funds to grow the business and that’s where the capital markets come in. Also, their original backers want to cash out on favourable terms. My sense is that most of these high profile companies will go public over the next 12 months and that’s why they are worth watching.
However, as I’ve said before, I am not a fan of buying IPOs, no matter how attractive or interesting the company is. It is truly a “mug’s game” and individual investors and even most institutions don’t stand a chance given that the price is not determined by what the company is worth but rather by the perceived demand for the shares.
Many of these neophyte disrupters will be overhyped by the financial media and the brokers, with the result that the share price will have a huge run on day one. Some will be up 25-50 per cent on the opening bell. That is not the time to buy them. Do, however, keep an eye on the stock price and read the prospectus.
Then, let them become “seasoned”, pick up some analyst coverage, and report a quarter (or two) as a public company. By waiting, there is always the risk that you might forego some upside, but in my experience many hot IPOs revisit the original offering price (or lower) at a future date.
Facebook and Tesla are good examples of over hyped, over-priced IP.



Still interested in this stock - just need some light around capital raising price, how much is being raised and plan for funds. Time to wait and see!