Quote of The Week "It's easy to understand why you would buy the IPO of a company making a lot of money... It's even understandable when folks want to buy 'the story' of a company only making a little money... But buying the stock of companies that are LOSING money? Not it."
-- The Trader
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| | | Traders:
I thought I'd make your weekend by making you think twice about buying shares in the WeWork IPO... assuming that's your intent... and assuming it makes it across the finish line.
I know the subject line to this email suggested I'd tell you how to buy the IPO... so here goes... Don't put a dime of your money into WeWork. That's exactly how you buy it... you don't.
The office-sharing start-up was once valued at $47 billion (yes, billion with a b) and may soon be valued at less than $15 billion. In its IPO filing, WeWork disclosed a $900 million loss for the first six months of 2019. Almost a billion dollars in losses...
Sign you up right?
Plenty of other companies have come with losses to the IPO market. Why shouldn't WeWork? As such, WeWork is moving forward.
I thought it might be interesting to take a look at some other stocks that came to market the year after losing money.
As you can see, the results can be pretty ugly. |
| | Uber, UBER
IPO May 2019; EBITDA in Pre-IPO Year -$1,847,000,000 |
| | Lyft, LYFT
IPO March 2019; EBITDA in Pre-IPO Year -$944,000,000 |
| | Snap, SNAP
IPO March 2017; EBITDA in Pre-IPO Year -$459,000,000 |
| | Groupon, GRPN
IPO November 2011; EBITDA in Pre-IPO Year -$277,000,000 |
| | Vonage Holdings, VG
IPO May 2006; EBITDA in Pre-IPO Year -$267,000,000 |
| | NIO, NIO
IPO September 2018; EBITDA in Pre-IPO Year -$878,000,000 |
| | Uxin, UXIN
IPO June 2018; EBITDA in Pre-IPO Year -$267,000,000 |
| | | | Might make sense to steer clear of WeWork.
As always, make up your own mind and, more important, minimize your risk no matter what you do.
KIS,
The Trader
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