All in a day's work

This topic is on my mind for a period of time.

Why do people chase after IPO. I can never understand.
Doesn't chasing IPOs almost equates to gambling?

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Extracted from Wikipedia,

Initial Public Offering (IPO), also referred to simply as a "public offering", is when a company issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.

In an IPO, the issuer may obtain the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market.

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I'd like to draw your attention to a few points.

1. First time.

Alright don't bother about First time. The point I'm trying to bring across is that, companies that are listed may not be companies of a rich history of proven growth. Neither are companies listed for the sole purpose to benefit the shareholders, the "outsiders". If nothing is proven, how can you access it's worth?

2. Seeking capital to expand

Is there a common belief that companies that gets itself listed is a good and profitable company? Didn't it occur to anyone that it is the company that NEEDS the capital, our $, to expand NOT that we need the company to grow our wealth. Is the difference clear enough?

Not forgetting the fact that the capital required is by no means a small amount. It is huge. So by linking the above point, a new company needing huge capital influx, doesn't it simply means that the shares that is offered to the public is not cheap, rather it should be valued at it's maximum already?

3. Underwriting fees

Okay! This is the obvious, no companies gets listed for free.

Well, I don't deny that there could be companies that is very stable getting listed, take MASTERCARD for example. I'm obviously not going into this aspect but the ones that no one hear of. Somewhere out there, some group of people decides to list in SGX and the hype starts all over again.

1. Read/Hear the news of a potential company dealing with oil, not heard of, getting listed.
2. Head towards the atm and subscribe for the shares, and hope.
3. If the subscription went through, celebrate. Else,luck's fault.
4. If @ opening it went higher, credit it to one's intelligence.
5. If @ opening it went lower, REMAIN HOPEFUL and wait for a rebound.
6. Lastly, blame the company but yourself.

There are over 500 companies listed on SGX with proven results and records, why one that is new and unheard of.

Chase IPOs? Think again.