Have you noticed the near financial/business media blackout when it comes to anything like IPO’s and their spawning stable-mates known as “Unicorns?”
Remember when debuting an IPO was met with such media fanfare it allowed for the viewing public to fawn, or feel really insignificant (more like loser) for not being one of the “beautiful people” paraded across magazine covers, screens, or conference stages?
So alluring was the “next IPO celebrity” made out to be it probably made Hollywood’s PR machine envious. Hint: Remember SnapChat™ CEO Evan Spiegel’s many cover-shots including L’Uomo Vogue™, GQ™, and others? Here’s another hint: “sex symbol.”
Yet, that was way back in October of 2015. You know, before the next-in-rotation IPO to save the IPO world was to hit the “markets.” Then it did. How’s it all going since then? Hint: When was the last time you read about Snapchat in general, never-mind its “bares all” centerfold CEO? Hint: ________________(insert crickets here.)
Here’s the real reason, and I’ll use what “The Valley” likes to call “pictures.” To wit:
The above represents Snap Inc. via a daily chart since its IPO debut. Over the past few days I’ve noticed the growing chorus of “Snap is now up double digits from its lows! Is this a sign things have turned?” Then some next-in-rotation fund manager, or next-in-rotation technology aficionado is queued up to start making that “This is where it all turns around” argument of the ridiculous.
It’s all pure malarkey. Here’s why…
Snap reports earnings next week. What we’re currently seeing (all my opinion, of course) is just the pre-earnings release positioning. i.e., Ladies and gentlemen, place your bets, Red or Black?
What you should also notice and compare to what you “hear” is those “double-digit gains” are the results of the stock bouncing after plummeting, as well as still remaining, below its original IPO price. i.e., Those lucky enough to get in before everyone else are still underwater. (e.g., $17 was the IPO) And those whom got to “get in” after? All I’ll say is, “You have my condolences.”
Yet, that’s not what you’ll read, hear, or watch across the media spectrum of business and finance. No, just like lollipops and sugar candy: Unicorns are just as magical, sweet, and alluring as the name implies, and would never rot your teeth. What it does to your investment portfolio – is another matter entirely. I hear mum’s the word on that topic.
Now, if you think I’m picking on Snapchat as if it were now some poor defenseless entity in the school play-yard. Let me stop here and help you remember something you might have missed. Because from what I can tell – unless I bring it up – it seems to have been relinquished to the, “Don’t bring that up again unless there’s something good to say” section. Ready? Again, to wit:
Then of course, there’s this…
Sounds just fantastic, right? I mean “68% Jump.” That’s double-digit double digits, right? This must be a hit! Actually, I guess it is, for here’s another headline, to wit:
This was all just a few weeks ago, I mean with such endorsement that IPO should be screaming higher, right? Especially with the tech sector (or NASDAQ™) indexes at all time highs, again, right, I mean, correct?
Fair argument, only thing left is to check it out, agree? Again, to wit:
The only thing I can gather that may be of little condolences to some is this:
At least those that bought in at the $14 offering are still above water.
If that’s any consolation, again, you have my condolences.
Then again, maybe what’s needed to help arbitrage away any IPO risk is to do something via those newfangled ICO’s to help make up, or hedge against losses. After-all I hear they are all the rage across the media today. Just ask them! Please!
IPO’s are so 2016. ICO’s are where the real mythical money is made today. Again, just ask the main stream financial media. I’m sure they’re talking about it right now with some next-in-rotation tech aficionados’ spewing advice on how you “must get in, and get in now!” Of course you’ll also hear (but you have to listen very carefully) the now pre-requisite disclaimer of – “Of course this may or will end badly.”
Too bad they weren’t saying that during the IPO boom. Oh well I guess, it’s not like it’s their money at risk, it’s only yours. So onward and upward.
© 2017 Mark St.Cyr