Roku's IPO Valuation Typical Of Recent Cult Stock Offerings
Wall Street is infamous for bringing overvalued tech IPOs during the latter stages of a bull market.
Many of these IPO overvaluations are driven by an attractive product or service that captures the attention of investors.
The narrative of a hot product or service enables IPO underwriters to drum up enthusiasm for the offering, hence the overvalued offering price.
After the IPO party is over, then the reality of quarterly financial reports begin to hit home. It becomes clear that the over-promised hype of the IPO does not match the reality of the company's actual performance.
This is the classic pump and dump scheme that Wall Street underwriters have employed for decades. Millennials being the newest generation to experience Wall Street's ways are now likely wiser, albeit less wealthy.
This idea was discussed in more depth with members of my private investing community, Trader's Idea Flow.
Roku (NASDAQ: ROKU) is becoming a cult stock. Visit the CHAT ROOMS of any stock forum and gauge the age, investment experience, and enthusiasm of investors in Roku. If you have been frequenting chat forums on Seeking Alpha and elsewhere for relatively recent IPOs like GoPro (NASDAQ: GPRO), Fitbit (NASDAQ: FIT), Snap (NASDAQ: SNAP) and now Roku then you are aware of the strong affinity of millennials for these stocks and respective products. It is great to see the next generation of capitalists emerging. It is not so great to see how Wall Street has been treating these younger investors.
surces:https://seekingalpha.com/article/4113020-rokus-ipo-valuation-typical-recent-cult-stock-offerings
Many of these IPO overvaluations are driven by an attractive product or service that captures the attention of investors.
The narrative of a hot product or service enables IPO underwriters to drum up enthusiasm for the offering, hence the overvalued offering price.
After the IPO party is over, then the reality of quarterly financial reports begin to hit home. It becomes clear that the over-promised hype of the IPO does not match the reality of the company's actual performance.
This is the classic pump and dump scheme that Wall Street underwriters have employed for decades. Millennials being the newest generation to experience Wall Street's ways are now likely wiser, albeit less wealthy.
This idea was discussed in more depth with members of my private investing community, Trader's Idea Flow.
Roku (NASDAQ: ROKU) is becoming a cult stock. Visit the CHAT ROOMS of any stock forum and gauge the age, investment experience, and enthusiasm of investors in Roku. If you have been frequenting chat forums on Seeking Alpha and elsewhere for relatively recent IPOs like GoPro (NASDAQ: GPRO), Fitbit (NASDAQ: FIT), Snap (NASDAQ: SNAP) and now Roku then you are aware of the strong affinity of millennials for these stocks and respective products. It is great to see the next generation of capitalists emerging. It is not so great to see how Wall Street has been treating these younger investors.
surces:https://seekingalpha.com/article/4113020-rokus-ipo-valuation-typical-recent-cult-stock-offerings
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