Buffett says “the IPO market regains vitality is a bad investment idea” due to Arm listing
Speaking of IPOs (initial listing), they are highly popular as products that are easy to make money in a short period of time, and investor applications often flood in for stocks with a high previous reputation. The initial public offering market, which had been sluggish for 1 year $Arm Holdings (ARM.US)$It is regaining vitality thanks to long-awaited deals that will soon be listed on a trial basis, such as Instacart, etc. However, before investors go ahead with this, I want them to consider Warren Buffett's assertion that “initial public offering stocks may not be worth investing in.”
We have built up assets with a keen eye for observation and the ability to see ahead $Berkshire Hathaway-A (BRK.A.US)$The Chief Executive Officer (CEO) of believes that bargains are rare in the IPO market.
because this is almostseller's marketThat's why. At the same time that it is possible to choose a favorable period for listing, this transaction, which involves special fees, is oftenCan be boosted by expensive variationsIt is said that will happen.
Charlie Munger, Buffett's long-time business partner, once said, “The general public that buys IPOs will be in a terrible situation.”
Both Mr. Buffett and Mr. Munger stated that the underwriting fees imposed by investment banks on IPOs are “ridiculous,” and that they raise the IPO price.
According to the results of PwC's analysis of 1,175 companies' public offering documents, the average cost of a company is the total IPO revenue4% to 7%So, the smaller the size of the company, the higher the fees.
The god of this investment is the stock marketAuction market where bargains pop up from time to timeI'm comparing it to On the other hand, it is said that the IPO market is similar to a negotiation market where it is difficult to obtain cheap securities.
To explain how unattractive IPOs are, Buffett spoke at the 2004 Berkshire Annual Meeting using the example of his home in Omaha.
Someone sold their house for $80,000, and the neighbor said they wouldn't sell a similar house for $50,000.
After World War II, Buffett studied under Benjamin Graham, known as the “father of value investing,” at Columbia University over many yearsAn experienced companyWhile I like it,start-upsYaDon't touch companies in industries you don't fully understandIt's called. Also, Buffett is in a certain industryProfitabilitywithcompetitivenessThere is, and even if time passesA company that can continue to stand the testThey say they like investing.
SoftBank G Arm IPO
On the other hand, $SoftBank Group (9984.JP)$The chip design company ARM, which Chairman and President Masayoshi Son is strongly focusing on, is scheduled to be listed on the NASDAQ on 9/13, and the target valuation is expected to exceed 52 billion dollars.
As the biggest IPO of the year, ARM has already attracted a lot of attention from the market. Meanwhile, SoftBank G, which is the seller of IPOs, has once again become a hot topic since past investment results were not very good. According to statistics, among SoftBank-backed companies that are still trading, IPOs that are traded above the issue price4 companies onlySo,21 companiesis below. What is the average IPO return for the entire portfolio-46%It is.
$Guardant Health (GH.US)$ $Alibaba (BABA.US)$ $Appier Group (4180.JP)$ $Uber Technologies (UBER.US)$ $DoorDash (DASH.US)$ $ACV Auctions (ACVA.US)$ $Vir Biotechnology (VIR.US)$ $Coupang (CPNG.US)$ $Relay Therapeutics (RLAY.US)$ $SBI Insurance Group (7326.JP)$ $Full Truck Alliance (YMM.US)$ $WeWork (WE.US)$ $VTEX (VTEX.US)$ $Exscientia (EXAI.US)$ $DiDi Global Inc (DIDIY.US)$ $Compass (COMP.US)$
This article uses automatic translation for some of its parts
Source: CNBC
ー MooMoo News Sherry
This article uses automatic translation for some of its parts
Source: CNBC
ー MooMoo News Sherry
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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182498567 : IPOs are not determined by winning or losing, and there are times when everything, even with one win, ends with a win. You can keep investing, this wins
ごにょにょ : IPO investment, IPO secondary. That's exactly why the investment strategy is different from Mr. Buffet![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
mitikusa 182498567 : I feel it.