IPO's for small companies are often overvalued. This is because...

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    IPO's for small companies are often overvalued. This is because the minimum IPO share price is 20 cents.

    We can use a PE ratio and EBITDA of $6.6m to determine fair value if the company stopped investing in acquisitions.

    A PE ratio of 5 suggests the share price should be around 9 cents. Therefore I would not purchase shares at 20 cents.
 
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3.6¢
Change
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