Topic: How To Invest

What is Pat’s commentary for the week of May 26, 2021

Article Excerpt

As we’ve often pointed out, IPOs tend to come to market when it’s a good time for the company or its insiders to sell. That may not be, and often isn’t, a good time for you to buy. One common problem is that the IPO sales process drums up a temporary wave of buying that can push up the stock’s price. When the buying dies down, the stock slumps. Still, good companies with good prospects do go public every year. One key Successful Investor way to cut IPO risk—and distinguish the good from the bad—is to wait till the next market slump and/or recession comes along. Then take a fresh look at how recent new issues are performing. You may find some of these companies have experienced business success, despite stock-market and economic turmoil. But their stock prices may have declined because the IPO hoopla has died down. PagerDuty Inc. first sold shares to the public in an April 2019 initial public offering (IPO) at…