Excerpt from a report in The Straits Times today.
Investors are becoming increasingly disillusioned with initial public offerings (IPOs) after buying into companies going public at what subsequently turned out to be the peak of their business, say industry observers... Investors gripe that companies over the past year or so have gone for a listing amid a scenario of rising profits and a recovery in the regional and global economies — yet, inexplicably, just a few months after making a much-feted debut, they post poor results.
Is this supposed to be a revelation?
IPOs involve existing owners selling parts of their business. Obviously, they would want to get the best price possible. Investors buying from such insiders need to go in with their eyes wide open.
Some inexperienced investors learn this the hard way.