Initial Public Offerings

“Investors even remotely tempted to buy new issues must ask themselves how they could possibly fare well when a savvy issuer and greedy underwriter are on the opposite side of every underwriting. … The deck is almost always stacked against the buyers.” Seth Klarman, A Margin of Safety, page 22

Robinhood says everyday investors should play a bigger role in the IPO market and is putting its money where its mouth is with its own listing. The popular stock-trading app plans to set aside up to 35% of shares in its coming IPO for individual investors, a much larger allocation than usual. Robinhood wants people to sign up to buy the shares on its new platform that provides access to IPOs before they start trading. What’s News Reporter Peter Rudegeair explains how Robinhood’s strategy would work.

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Robinhood will pay nearly $70 million to settle an investigation into its approval of risky strategies for ineligible traders and glitches that locked millions out of trading.

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Kailash Capital’s sister company, L2 Asset Management, runs market neutral, long/short, large-cap, and mid-cap long-only portfolios with a value and quality bias. L2 employs a highly disciplined investment process characterized by moderate concentration, low turnover, high tax efficiency, and low fees. While nobody can predict the future, we believe the recent resurgence in risk-adjusted returns seen across all products is the beginning of what may be a long period where speculation is punished, and prudence and patience rewarded.

ADDITIONAL READING

The topics discussed in this article are aimed at seasoned professionals, as such, we have included some extra reading for anyone seeking out more information related to the topics above.

Click the following to read more about Large Cap Companies, Market Neutral, Is a Bear Market Good or Bad

SOURCES

A Margin of Safety, Seth A. Klarman

Disclaimer

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