{"id":20856,"date":"2011-10-03T19:21:29","date_gmt":"2011-10-03T13:51:29","guid":{"rendered":"index.php\/2011\/10\/03\/ipos-the-story-so-far\/"},"modified":"2011-10-03T19:21:29","modified_gmt":"2011-10-03T13:51:29","slug":"ipos-the-story-so-far","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2011\/10\/03\/ipos-the-story-so-far\/","title":{"rendered":"IPOs: The Story So Far"},"content":{"rendered":"

2011 is definitely not turning out to be a year for IPO investors. IPOs have lost an average of 17% so far. The speed at which some of these have become penny stocks is truly amazing:<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Ticker<\/strong><\/font><\/font><\/td>\nTo-date performance<\/strong><\/font><\/font><\/td>\n<\/tr>\n
BGLOBAL<\/font><\/font><\/td>\n-85%<\/font><\/font><\/td>\n<\/tr>\n
ACROPETAL<\/font><\/font><\/td>\n-85%<\/font><\/font><\/td>\n<\/tr>\n
SHILPI<\/font><\/font><\/td>\n-84%<\/font><\/font><\/td>\n<\/tr>\n
CORAL-HUB<\/font><\/font><\/td>\n-80%<\/font><\/font><\/td>\n<\/tr>\n
SERVALL<\/font><\/font><\/td>\n-79%<\/font><\/font><\/td>\n<\/tr>\n
BROOKS<\/font><\/font><\/td>\n-77%<\/font><\/font><\/td>\n<\/tr>\n
SANGHVIFOR<\/font><\/font><\/td>\n-72%<\/font><\/font><\/td>\n<\/tr>\n
TELEMARINE<\/font><\/font><\/td>\n-56%<\/font><\/font><\/td>\n<\/tr>\n
SPYL<\/font><\/font><\/td>\n-56%<\/font><\/font><\/td>\n<\/tr>\n
SRSLTD<\/font><\/font><\/td>\n-51%<\/font><\/font><\/td>\n<\/tr>\n
DYNASYS<\/font><\/font><\/td>\n-50%<\/font><\/font><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Out of the 69 stocks that were analyzed, an opening day fizzle forebodes a dismal future for the stock: 48% of the IPOs had a down day on their first day and continue to perform poorly till date. 25% of the IPOs performed poorly in spite of spiking the first day \u2013 so there really is no magic forecasting too that can guide investors through the process.<\/p>\n

I would take the side of Warren Buffett who once said: <\/p>\n

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It’s almost a mathematical impossibility to imagine that, out of the thousands of things for sale on a given day, the most attractively priced is the one being sold by a knowledgeable seller (company insiders) to a less-knowledgeable buyer (investors).<\/p>\n<\/blockquote>\n

An IPO\u2019ed stock just doesn\u2019t have all the pieces of information that an astute investor considers before buying the stock. You cannot do technical analysis on a stock that has never traded, nor can you dig into its previous years\u2019 balance-sheets to discover (or at least verify) strengths and weaknesses. It would be smart to check out the lead book-runner as well. If its some garage operation based out of Kalasipalya, then it would serve you well to stay away from the issue. For example: BGLOBAL<\/a>, ACROPETAL<\/a>, SHILPI<\/a>, SERVALL<\/a> were run by Almondz Global Securities, Saffron Capital Advisors, D&A Financial Services, Keynote Corporate Services respectively. The next time you see issues brought out by these guys, tread carefully!<\/p>\n

Here\u2019s the chart you\u2019ve been waiting for:<\/p>\n

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