FAKE FINANCIAL NEWS
IPOs Aren’t For Real By Vonetta Logan
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Fake IPOs Scrappy entrepreneurs taking their companies public to raise capital, and average investors getting in on the ground floor, hasn’t happened in many moons. But who wants to read about venture capital and private investment funds liquidating their shares and painting the top of the market? In a report published last year titled, “What is the point of the equity market?” Duncan Lamont, head of research and analytics for Schroders, explains that the number of U.S.listed companies has, “shrunk by around half over the past 20 years.” And that, “financing needs can be met more cheaply and easily by other sources, without much of the baggage
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Not only are the markets liquid, but they’re transparent, and the market doesn’t even bat an eye to mark down the price of a formerly high-flying unicorn
that comes with public Traders and listing.” Is there a dating company market that also comes executives gather without baggage? in May for the Uber Technologies IPO Asking for a friend. Ah sweet, free and easy on the trading floor of the New York cash flow. Remember, Stock Exchange. interest rates hovered near zero for a long time and a lot of large venture capital and private equity firms were making it rain like it was a Drake video. A guy just raised $1.6 million for water in a can called “Liquid
PHOTOGRAPH: REUTERS/BRENDAN MCDERMID
POs (initial public offerings) are back, baby! Here at luckbox, the editors are partying like it’s the dot com bubble of 1999. To borrow a line from the seminal film The Social Network, the story of Facebook (FB) evolving from dorm-room-based stalking site to global threat to democracy, co-creator of Napster (NAPS) Sean Parker supposedly tells a young Mark Zuckerburg, “A million dollars isn’t cool. You know what’s cool? A billion dollars!” Except in this current class of IPOs it’s more like, “Losing a million dollars isn’t cool. You know what’s cool? Losing a billion dollars, but then deciding to go public anyway.” OK, that’s not as catchy, but that’s what’s happening with the latest stable of unicorns—those private companies worth a billion dollars or more. Why can’t these pretty ponies hit their stride? Grab any high school textbook ... do high schools still use textbooks? Anyway, grab any tablet/e-reader/textbook and it will probably define IPOs as companies raising capital by offering their first shares of stock to momand-pop investors who are hungry for a real piece of some grade-A capitalist pie. “Tale as old as time, true as it can be, investors all get fleeeeeeced.” No Beauty and the Beast fans?
luckbox | july 2019
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6/7/19 11:22 AM
