The finance industry is chock full of insider jargon and arcane theories that leave many of us on the outside, looking in, wanting in, but unable to convert the esoteric concepts into practical action items for generating wealth. It’s easy to be worn down by information overload that also kills your curiosity.

Your investing experience is directly affected by how much you learn about the mechanics of the world.

Here at Firstline we want to nurture your financial, business, economic and just general curiosity so that whatever your aim, you’re not just looking in, not only wanting in; people, you INSIDE.

With this in mind, thanks for watching today’s instalment of our Three Minute Take (3MT) series: “What Is An IPO?”

TRANSCRIPT:

3 MINUTE TAKE: What Is An IPO?

“INITIAL PUBLIC OFFERING“:

WHY INVEST IN AN IPO?
Can This Make Me Money?

1. Buy Low, Sell High.
   • IPO companies often have high growth potential which can bring in significant returns in the long term.
2. Get In On The Action Early!
   • Investors should look out for IPOs with a competitive advantage in high growth markets.
   • Fair entry pricing afford IPO investors wonderful opportunities to participate in the exciting early growth phase of a company’s life cycle. 

WHAT TO CONSIDER BEFORE INVESTING IN AN IPO

1. Failure To Launch
   • A company’s expected forecast of success is not a guarantee as it can be impacted by several unknowns including fundamental, macro, and geopolitical issues beyond the company’s controls.
2. Your Risk Appetite
   • If the IPO company is in a volatile market but your risk appetite is for softer swings, this IPO might not be the best fit.
   • IPOs may be better suited for investors with longterm time horizons who can bear a substantial loss of principal. 
3. Heavy Media Attention
   • Heavy and positive media attention doesn’t mean the IPO is a good fit for you
   • IPO conman its often pay for publicity, but a detailed read of the prospectus will confirm whether the IPO is indeed in line with your investment goals. 
   • If unsure, be sure to seek advice from a financial advisor you trust. 
4. Pricing
   • In the early days of an IPO, its market trading can be quite volatile. It’s possible for the price to drop below the issue IPO price.
   • Some investors wait for the dust to settle within the first few weeks of an IPO launch before investing. 

Three Minute Take. Want to learn more? Check out our website www.firstlinesecurities.com for more info on investing!