by Michael Keane
A few things happened in the last couple of weeks in the IPO arena that strengthens the desire to having decentralized value more prominent. The not so wonderful feelings of fear and greed were (and are) currently present in the WeWork, Peloton, and Saudi Aramco IPO process and it hurt all three companies.
The closely guarded and deeply centralized IPO process did not work well. Conversations in the media like Sonali Basak from Bloomberg are picking up on this topic. First, the IPO of We Work was pulled with the drama of its financials and the CEO. The IPO of Peloton fell flat on its face. Some feel it got taken on the idea that the valuation is for a tech company. The government of Saudi Arabia is doing more than a few things not in its normal behavior in order to get the IPO of Saudi Aramco done. They seem to be rushing through to the IPO, ignoring the security issues as well as the stagnation and possible downward momentum in the price of oil.
One improvement may be the idea of the Dutch auction model that Google
used. It just seems that there is a better deal out there for investors
when it comes to IPO's. Firms not associated with the company going
public like Morningstar and other analyst firms can and likely should be
the driver behind how an IPO should be analyzed and sized up for
investors.
Possible investors in all three companies would be served better in its goals of investment with a more visible and transparent IPO process. Sometimes, it can be a bad combination when you have private company investors looking to profit from their investment by having an IPO and investment bankers hungry for that fee. Taken separately, both are fine. But together, the above mentioned issues show up on a regular basis. If a less biased look at the company can happen, new investors, the company, and the market will be better served.
Good luck in all your trading and investing matters!
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posts on this blog are information and opinions only. They are not to
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