Synopsis
The logic of avoiding IPOs of large money-burning internet stocks is merely a special case of the general rule of avoiding all IPOs. Nothing about IPOs makes them suitable for the casual retail investor. Compared to listed stocks, IPOs are actually less suitable.
Last week, amid the cheerleading of the Zomato IPO, a small minority of commentators pointed out the advanced state of undress the emperor was in. However, the general talk was that there was some kind of euphoria about this IPO. In the Zomato IPO as well as the IPOs of similar outfits that will no doubt follow, this talk of euphoria will no doubt be at a fever pitch. To explain the reason, I’ll narrate an old lawyer joke.
A famous professor of
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