Word: ipos
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
FINANCE: Watch Out for IPO Mania...
...going public is likely to decline the longer the IPOfest lasts. In a correction, these weaker issues would fall faster and harder than the general market. "A strong market opens the window for butterflies and hummingbirds," says Charles Ronson, a New York City stock analyst who publishes the newsletter IPO Value Monitor. "But it also lets in the houseflies and spiders...
...trick for investors is to separate the best from the pests. A study by the Jefferson Group tracking the 3,186 companies that went public during the 1980s found that investors had only a 1-in-3 chance of making money in IPOs. While the stock prices rose for a third of the firms, they fell for a quarter of them. About 42% of the concerns failed or merged by the end of the decade. In a four-year study of about 900 initial public offerings, Cornell University finance professor Roni Michaely discovered that IPOs generally outperform the rest...
...investors are winners, and some IPOs flame out rapidly. But savvy insiders have a pretty clear idea of which new offerings are destined to be hot. That is because many are deliberately underpriced by the investment firms that bring them to market in order to minimize their own risk. (These underwriters are left holding the shares if not enough investors can be found.) When there is excessive demand for an upcoming IPO -- and thus a pretty good guarantee that the shares will jump once they go on the open market -- big brokers dole out the privilege of buying them...
...Speaker managed to join the elite ranks of favored IPO buyers through a high school chum who is now his broker, Peter de Roetth of Boston's Account Management Corp. De Roetth defended his sweet offerings by saying, "I would like Tom Foley not to have to think about money." Putting up very little cash, Foley allowed De Roetth to buy and quickly sell shares in companies that rose dramatically in value soon after they were issued. Says Jay Ritter, a professor of finance at the University of Illinois: "Speculators like Foley are just feeding at the trough, throwing sand...