Today I am being invited to a company IPO talk. The company is in Catalyst board for one of the country and now they are trying to go on mainboard. The reception is good, with warm greeting from the receptionist and the refreshment before their CEO talk is really awesome. Okay, I am a food lover so bear with me here. I am going to my main point very soon.
So I waited like half an hour…. almost feel like waiting too long and want to walk out of the door then a lot of VVIP people started to walk inside. The speech started with COO giving a talk, quite motivating but feeling a bit awkward (not sure how I feel,.maybe generation gap)… I will say then come to a video to share more about his company (the music is quite irritating, in my humble opinion, they can use a better music). Then, their CEO turn to share an inspiration speech like why they do this kind of startup and etc. I would like to apologize here that I am not comfortable to reveal much of their company background and their industry as it is pretty obvious to show which company that I am talking about. Also, my main point of writing this article is not to criticize or giving any feedback but is just act as a bridge to my points that I would like to raise below. So bear with me again for a little more.
So let us cut the story short and goes to the ending of the speech when everyone is getting an IPO form and going to walk out then I got this burning question I would like to ask their CEO but seem like a lot of people are interested to raise their burning questions too. So when I am going to walk out and leave the place, I manage to talk with one of their manager and I raise this question to him.
“Why listing the company during this point of time, where market does not look too good when anytime market is subjected to correction and crash?”
Then, he reply me that no one able to know when will the market crash and if market really so unfortunate to crash at this moment, this give them a more motivating factor to get IPO at this point of time as back to 2009 there is no company IPO.
So I do some googling and found that the statement is not true and valid as for that country, there are a number of company IPO at that point of time. Just that they numbers of IPO company are not performing as year like 2003 to 2007 as investor risk appetite was sharply reduce (might give hurdle for them to IPO).
Then, he talk about buy and hold strategy….quote Warren Buffet….
“If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”
Well, i just keep quiet, I thanks him for his time to talk with me and then walk away. I will say, Let us just agree to disagree.
But here is my thought with some research, now the market yet to crash but let us see how the IPO company performing in SG for 2016.
reference from: SGX – IPO PERFORMANCE
Out of 6 IPO company this year, only 2 out of 6 is trading above their IPO price now and if you want to know more why these 2 company can trade above their IPO price you may want to check who are their client and their business modal. (:D)
That is to say… even the market not yet crash the economy is already undergo harsh condition where investor risk appetite was sharply reduce. Not much demand at the current moment to push those IPO company share price to a higher price.
Imagine if market is undergo correction or crash (O_O)ll…..
You may argue that different country has different market sentiment. Well, time will tell.
So my take for myself after evaluating their business modal and include equities market future projection, my conclusion is…
I will not buy at this uncertain time.
After I walk out from the conference, I unconsciously say this to myself,
Cash Is The King Now