IPO Stocks May Not Be Worth Their Hype
Many people are interested in whether they should invest in an Initial Public Offering (IPO), which are the first shares offered by a new publicly traded company. IPOs often draw a lot of media attention relative to companies that obtained fame prior to their status as a new publicly traded company (think: Facebook).
One reason buying shares of IPOs is more complicated than investing in established stocks is the lack of information available about past sales, earnings and statistics. While established stocks have reviewable history of performance charts, IPO companies listed on the open market for the first time are often only accompanied by chart analysis
Additionally, be aware that the share price often increases heavily in the first few weeks of the sale. With a high number of buyers and lower number of sellers, the hype following the initial breakthrough of an IPO company recently listed in the market for the first time does not guarantee that the company will do well. It is imperative to do some objective research on the company instead of just relying on news articles, which are often fueled by consumer trends and interest.
Know that you will not lose out on profitable gains if you do not buy in on the IPOs first day. A good tip is to determine the lock-up period and watch how the stock fluctuates in the week after the lock-up expires. If the stock value plummets in the first few weeks, this could indicate that shares are being sold rapidly, and you may decide the stock is not worth owning.
As with any stock, IPOs should be researched and investigated just as thoroughly as any established stocks. Taking the time to calculate potential pit falls before buying will result in a more calculated risk and ultimately a benefit to your portfolio.
Verizon/AOL Deal Anticipated to be Completed this Summer
Analysts predict Verizon’s purchase of AOL for $4.4 billion will be completed by the end of summer 2015. The math works out to $50.00 per share and will result in Verizon gaining such AOL assets as the Huffington Post, TechCrunch and AOL.com.
Though it may seem surprising, AOL’s first quarter earnings report shows that more than 2.1 million people still use dial up internet services. As part of the acquisition, Verizon will gain control over AOL’s subscription services.
Analysts report that the deal could result in more advertising and ad targeting from Verizon toward consumers. This could manifest itself through personalized ads, online videos and content placed on Verizon handsets. Verizon will also have access to the “One by AOL” platform, which lets customers buy ads across media platforms, including video, internet and television.
Gender Gap Widens as Women’s Share of New Businesses Falls
In 2014, women opened just 36.8% of new U.S. businesses. Over the last nineteen years, this figure has dropped 4%, and it is likely reflective of both macroeconomic factors and unique obstacles facing female entrepreneurs, according to analysts.
Though male and female business owners tend to approach entrepreneurship with similar credit profiles, an Experian analysis shows that men are more likely to start contracting or plumbing and heating companies, while women are more likely to open beauty shops, retail stores and personal-services businesses. Additionally, studies have shown that women have significantly less access to start up capital. Between 2011 and 2013, only 3% of total venture-capital investments went to companies with a female CEO and only 9% of seed funding was awarded with a female CEO.
New data also shows that the percentage of people under age 30 who own a private business has reached a 24-year-low. Among women ages 35-44, start up activity has fallen 20% since 1996 while simultaneously rising 16% for men in the same age group. Part of this trend could be due to self-perception. Only 45.9% of U.S. women felt they had the capabilities to be an entrepreneur, compared with 61% of men who felt they were capable of being an entrepreneur.
Buying a Used Car? Avoid These Known Pitfalls
With more than 50% of purchasers open to buying used cars, there has never been a more important time to be an educated auto consumer. Experts consistently advocate “do your research” before purchasing, but what exactly does that mean? Here are the most common tips we have seen from the pros.
- Request vehicle certifications on any car you’re interested in purchasing. Certification insures that whichever vehicle you’re considering, though used, still carries some type of warranty from the dealership. If the car is not certified, you have the option of requesting that the dealer certify it. However, if the car is not already certified and you have to request dealer certification, be prepared to pay higher than sticker price for the vehicle.
- Beware of driving off the lot before a finance deal has been approved. Since the majority of car sales occur on the weekends, deals are often made outside the hours of finance companies. If you finance through the dealership, be sure to ask whether your finance deal has been approved before driving off the lot. Additionally, it’s often cheaper to forego the dealership’s loan altogether and instead work with a local bank or Credit Union to come up with your own financing plan.
- Finally, get a vehicle history report. Vehicle history reports are sold by numerous companies so long as you can provide the vehicle identification number (VIN) or even just a license plate number. Negative indicators on a vehicle history report can include anything from a salvage title, which means the vehicle was once declared totaled by an insurance company, to reports of the odometer being rolled back.
Prepared by Katelyn Dieffenderfer