IPOs Of The Smallest Companies Post Astonishing Failure Rates, But Bankers Still Win

  • 📰 Forbes
  • ⏱ Reading Time:
  • 67 sec. here
  • 3 min. at publisher
  • 📊 Quality Score:
  • News: 30%
  • Publisher: 53%

Portugal Notícia Notícia

Portugal Últimas Notícias,Portugal Manchetes

I'm a graduate of the University of Miami. Before joining Forbes I worked as a reporter and editor at Bloomberg where I covered everything from sports to how negative rates impacted the Black-Scholes model.

executives at Bay Area broadband company Actelis Networks felt a hankering to go public. They fixed their eyes on the Nasdaq prize. But there was a snag: their stock, restricted to employees and early investors,What happened next is a textbook case, according to new research on microcap companies, defined as having less than $300 million in stock value, and their initial public offerings.

What was a gold mine for the bankers turned out to be the shaft for the retail investors. Fast-forward a week, and Actelis’ stock took a 37% nosedive, perhaps aided by a mad dash to cash in on those warrants while they were hot. Today, 17 months later, Actelis trades at about a dollar a share, down 95% from the initial first-day $24 close. The company didn’t respond to requests for comment.

The merits of having the big guns buy your stock are stark after a company spends time trading on OTC Markets, which is less formal, has no middleman and carries with it a reputation for being edgy. Retail investors, the kind who trade at home, account for about. They can be a fickle bunch, often swayed by short-term hiccups, a report on social media or the financial flavor of the week, making them more of a wild card for companies trying to maintain steady stock values.

Flip the page and look at a comparable group of stocks, at least in size, like the iShares MicroCap ETF, where 45% of shares are held by heavyweight investors. Clearly, just being on an exchange isn’t enough to entice the heavy hitters.“You know these aren’t being offered to institutional investors or to buy-and-hold retail,” Paltrowitz told. “They’re being sold to, in essence, unregistered stock flippers who see these deals coming.

Resumimos esta notícia para que você possa lê-la rapidamente. Se você se interessou pela notícia, pode ler o texto completo aqui. Consulte Mais informação:

 /  🏆 394. in PT
 

Obrigado pelo seu comentário. Seu comentário será publicado após ser revisado.

Portugal Últimas Notícias, Portugal Manchetes

Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.

These companies reporting in the week ahead have a history of beating estimates and risingWatch these names for an earnings beat that could propel shares higher.
Fonte: CNBC - 🏆 12. / 72 Consulte Mais informação »

These Companies Are Being Squeezed by Higher RatesSurging interest expenses are wiping out profits for some issuers of risky loans
Fonte: WSJ - 🏆 98. / 63 Consulte Mais informação »

US companies increasingly eliminate college degrees as a requirement amid ‘out-of-control’ school costsU.S. businesses such as Walmart, IBM and Google are eliminating college degree requirements for some corporate roles as companies put more emphasis on skills.
Fonte: FoxNews - 🏆 9. / 87 Consulte Mais informação »

How China’s EV Boom Caught Western Car Companies Asleep at the WheelAuto execs in the US, Europe, and Japan never thought Chinese EVs were a threat. Now they're coming to wipe the floor with their Western counterparts.
Fonte: WIREDBusiness - 🏆 68. / 68 Consulte Mais informação »

US companies increasingly eliminate college degrees as requirement amid 'out-of-control' school costs'If you are going to work for a tech company, what's more important? A college degree or practical experience that you can code,' one entrepreneur said.
Fonte: FOX29philly - 🏆 570. / 51 Consulte Mais informação »