What makes a good initial public offering (IPO)?

What makes a good initial public offering (IPO)?

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  1. Michael Cornell says:

    I have not bought an IPO for many, many, years I cannot see that changing.
    When I see an IPO I always ask myself:
    ‘If the company is so good, why is it being sold off?’ ‘Why are the current owners getting out?’ ‘How much debt have the current owners loaded it up with?’ ‘What is in it for me?’ Invariably my answers are negative. Not always but often. Post IPO, after a shake down period, problems surface and the market can see the reality of what was being sold and why, all to often it has four legs and barks.
    Good IPO’s are sold to the big players, understandable but yet another reason to be very wary.
    In short I consider; ‘who is the biggest fool’, the seller, who has all the facts about the business or me, with limited information, mixed understanding of the business, no insider knowledge and a very limited understanding of accounts.

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