School me on investing...

I don’t understand the stock market, but is there a reasonable explanation why that stock price soared and then crashed so quickly? It seemed obvious that it would tank, did everyone involved know that too? Did it jump because a bunch of people bought it and now they’re out of over half their investment in a few weeks? It makes no sense to me.

 

IPOs exist to do two things:
1) let the company owners cash out to the retail idiots
2) generate fees for the IPO industry

 

I have a pretty good idea why, but the nature of the underlying company, and the rules of posting here don't mesh.

EDIT : I will say that I would love to see the short interest on the stock, and the identity of all the large short sellers

 

This is one time we'd definitely agree on the existence, if not the nature, of a conspiracy.

 

Well, we can give him some information without getting close to that line. The price soared at the IPO because a lot of stupid people and a lot of trusting people who don't know enough of about the stock market saw the name and got fooled.

It then crashed as more started to dig into what it is the company actually does and what kind of revenues that generates.

Yes, they knew that they would be found out eventually. But by the time that happens, they've already made a lot of money.

 

That would explain the result, but not the speed with which it is happening. That haste requires the concerted effort of A LOT of money motivated by something other than financial gain.

There. I think that is as far as I can take that point here.

 

Don't SPACS typically elicit a lot more suspicion than "regular" IPOs?

 

depends on the business model. i'd say this, of recent, there's more and more money trying to achieve the Amazon model, ie. pump enough money in at a loss for a while until you undercut your competitors and then profit because there are no more left. Uber, WeWork, etc...

Those whales want their money back and profits ASAP. If you're a Series A investor and your investment is going to IPO, who wouldn't be dumping at that moment? When a company is built to cash in on market behaviors rather than organically grow to a market leader thru shear excellence and time, you get a bunch of that. If it still has long term merit, it'll slow climb back. If not, it'll go away.

 

I see where you're goin...

One data point to ponder, the gold price was manipulated for a very long time. You can do it when you are able to draw upon the unlimited funds of a central bank. Monkeyhammering an individual stock is childs play in comparison.

 

As they should.

But I still am of the opinion that there is more to it than pure market forces.

Why is the orange elephant in the room.

 

Don't invest in OneX shits.

 

That was my understanding after reading about it a few weeks ago, I just assumed there had to more to it because you’d have to be pretty dumb to throw money away like that. Other than the one guy, is anyone else making money off it?

 

The lawyers. Always the lawyers.

I'm surprised that there haven't been class action suits brought yet.

I wonder if a class action suit could be brought against an individual related to this equity.

Maybe that's the 4D chess here: issue the stock, which predictably crashes, bringing lawsuits, the defense subpoenas the short interest holder's identities, proving the collusion I alluded to earlier.

 

Lets not forget 'good' companies arent put out for IPO. If you got something making lots of money you hold onto it or sell to another company for a pretty penny. Turds are put up for IPO. Then theyre saddled with compliance costs and having board fights and all the other shit that comes along with it.

 

And the investment banks.

 

Every time I start taking you a little seriously…

 

Right??? I was sporting a hard confused face as I read that

 

Im cynical. Watched way too much cnbc during the tech bubble.

 

My favorite investments are the ones that can generate passive income. Rental properties, multi-family four units are good investments in my opinion. Can hold you over during economic downturns and rental income can help pay for the mortgage if you lose your job.

 

Except when someone sneezes and the man says no one has to pay their rent for a year or so.