Buying an IPO (Initial Public Offering) is a tough choice for investors to make. An IPO is when a private company decides to list on a public stock exchange, like Snap Inc deciding to list on the NYSE at the start of 2017. One reason that 2017 IPOs are risky is because the companies that are going public are investing for growth and may not be profitable (yet).
Nine tech companies have already gone public in 2017: Alteryx, Carvana, Cloudera, Elevate Credit, Mulesoft, Netshoes, Okta, Snap and Yext (Source: TechCrunch).
The biggest IPO of 2017 is Snap Inc ($15.14), the social media app that is locked in a battle for users with Instagram Stories. If you invested in the Snap IPO you probably lost money because the stock currently is valued at below the IPO price of $17.
Recently Blue Apron ($6.65) completed it’s IPO at $10, the meal delivery service has recently closed below it’s IPO price too. Another cautionary tale for IPO investors.
Rumour has it that another tech stock is planning it’s IPO in 2017: Dropbox. The company is a data sharing business, and it could be the biggest U.S. technology company to go public since Snap Inc. Dropbox will begin interviewing investment banks in the coming weeks, according to sources(source: Fortune).
While investing in an IPO has it’s own risks, if you like the company enough and believe in their story for growth they present an interesting proposition.
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Comment below if you will or have invested in a 2017 IPO?