When IPO’s meet stock market reality

Today’s graph is a stark reminder that hyped IPO’s of tech unicorns do most often result into bad stock market investments. At ECP, we believe that investment banks are indeed doing an excellent and well-paid job in pricing and placing the IPO at least at fair value. It appears therefore difficult for us as investors to buy the company at the IPO at the required margin of safety to the fair value of the underlying business. That is why we tend to shy away from IPO’s and focus our time and energy on companies that are already listed.