Is it worth investing in an IPO?

What about Spotify? 

This is the question I almost certainly get asked when I see my friends and family. Not to forget long threads of discussions on our intelligent investing Facebook Group and other investing communities. Whenever a silicon valley darling gets public, it inevitably becomes the center of attention for a day if not months. 

I usually stay away! For us the intelligent investors, the IPO is either a playground of the day traders who hope to profit from the first few days of fluctuations or a chance for the private investors, the company itself and the investment bankers (well, assuming that they are hired!) to boost the price as high as possible. There is no need to rush into investing whatsoever.

If the company is a well-operated and benefits from a growing market, there would be enough opportunities to invest after the dust of the IPO settles down and a few quarters of operational data becomes available. It is always good to remind ourselves that all the great public companies we have come to know and invest in were once IPOs. Even if we don't invest during the IPO time, we still get enough opportunities to invest in them post IPO and we still get the chance to generate a significant return. Therefore, it is to the benefit of the public market investors to stand aside and let the dust of the IPO settle.In any case, today even for the fun of it, let's take a look at SPOT's Stock Card. You'll see how the lack of the availability of several data points makes investing in a recent IPO a not-so-intelligent investing decision.

As always, don't forget to visit All Stock Cards tab. We published 20 new Stock Cards this week, thanks to several Stock Card request from our community and users. I personally picked up a few stocks this week and added them to my Small & Nifty and League of 10Xers portfolios:

That's it for this week's Stock Card weekly. It would be great to hear from you and your views about how you decide to take risks. Join us on our Facebook group and let's have an intelligent investing conversation. More than 2000 intelligent investors have already joined us and we have fun discussing new investment ideas every day! Intelligent investing never stops!
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That's it for this week's Stock Card Weekly. If you had fun reading today's newsletter, celebrate by forwarding it to a friend or two.

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