I’m not a big fan of investing in initial public offerings (IPOs) when they first hit the market.
There’s always a pop in the share price because, after an IPO, only about 10% to 20% of total shares are traded at first.
It’s not until the lockup period ends — usually 180 days after the IPO prices, when insider shares open to the broader market — that you get a feel for the long-term performance of an IPO stock.
Because so few total shares are traded at first, there is much higher demand for supply. Thus the stock price inflates.
And demand for the Robinhood IPO will be astronomical after the online brokerage dominated headlines (good and bad) over the last year or so.
In this episode of The Bull & The Bear, I look at Robinhood’s upcoming IPO and show that, while attractive, you should stay away.
Be sure to also subscribe to our YouTube channel for more videos like my weekly Marijuana Market Update.
Have something you want us to talk about? Email email@example.com and give us your thoughts.
Check out moneyandmarkets.com, and sign up for our free newsletters that deliver you the most important and unbiased financial news, commentary, and actionable advice.
Also, follow us on: