It helps to do your homework before investing in an IPO

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It helps to do your homework before investing in an IPO
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Don’t buy into the hype but rather read financial statements to get insight into a company’s past performance

A string of analysts, advisers, brokers, bankers and company representatives are readily available to walk you through the investment case, five-year plans and reasons this is too good an opportunity to be missed. Picture: 123RF/LANGSTRUP

IPOs involve insiders selling shares to outside investors. Typically, these insiders are intimately involved in the business, either through direct management or via a seat on the board. They know the business better than anyone else … and they are choosing to sell. Every day stock exchanges around the world facilitate trades in the thousands of companies listed globally. All but a handful of trades occur with little fanfare, marketing or hype. The story of IPOs could not be more different. A string of analysts, advisers, brokers, bankers and company representatives are readily available to walk you through the investment case, five-year plans and reasons this is too good an opportunity to be missed.

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