I have never understood the retail interest in Initial Public Offerings. For every star IPO, many more disappoint or burn investors with overhyped pitches.
For my sins, I covered IPOs for nearly a decade for the Australian Financial Review, analysing several hundred and compiling the paper’s annual IPO special. Lots of small floats were garbage and some prospectuses mixed fiction, fantasy and fact.
Like a house sold at auction, IPOs are often “dressed up” to maximise the sale price. No vendor pours money into an asset getting readied for sale. Worse, investment and other costs are cut, to inflate earnings and the company’s valuation, causing longer-term operational damage.