Here are a couple of recent ones: VG's high was just 25 cents above its IPO price the first day, then it started heading downward. It was down 12% its first day, and has closed below the IPO price ever since. WRSP went up a few dollars on its first day, but ever since its second day it has never been above its IPO price.
Don't forgot Vonage - it fell about 30% off its IPO price and has not recovered. Then there are the satellite radio services.
This one certainly smells fishy BuyLow- Cramer made all his foolios poor again with his breathless buy under $25 and then put your sell orders in at $40 BS. As if it was so easy and do you know what? This jackass went for it- not so much for Kramer all he was saying was the obvious Macao + IPO = Home Run, but I miscalculated the market's mindset on this one. As for that lawsuit it was filed by Winnie Ho, 83, so I'm willing to wait her out. Stock will go up $9 when the brokerages can begin coverage- I wouldn't be surprised if the underwriters secretly supported the stock at the $20 level. Risk reward SEEMS slanted towards reward unless the whole thing is a giant sham...
Exactly. The downside risk is if something blows up between now and then - and familial lawsuits for 3 billion on a 550 mil market cap stock - in a Chinese Court - don't inspire confidence.
I'll tell you the problem here and it has nothing to do with fundamentals or lawsuits. The problem is that the curtain is closing on these stocks. At the start of 2006, it was energy energy energy. The end was all about everything except for energy but especially china and tech tech tech. This type of stock has had its run and now the curtain is closing. What is the next flavor of the day? Large cap value? Maybe energy? Pharmys?
Eagle the problem is I've seen some videos of the Macau set up, these casinos that are being built are off the hook- the $ they will bring in will be staggering. The market may come back to MPEL. The facts as I know it are MPEL has one of six licenses for casinos in Macau. That's about it. It's a crap shoot I admit -What value do we put on that fact? Only 6 that's not too many, scarcity has value . Why did the IPO not move? Warning sign? or opportunity? Eagle you are right the mood of the market shifted by the time they got listed-we may indeed start a new defensive cycle of energy worries- but in that lays opportunity...money is cascading into and out of China and a casino that will feed from that prosperous river can't be a bad thing . Can it?
Well, I don't have much of it, and I haven't sold it either. So far no crash and burn. . I'm a gambler at heart. The payoff for this could be HUGE. The downside is no worse than most other stocks. So, I'm willing to hang in there and see what happens, and I'm not going to die if I lose a few hundred dollars (because an IPO is not going to 0 within a month. It's pretty safe to say this isn't going to drop that much, even if it manages to go below the IPO price.... which as I expected, it hasn't). Of course, I don't really believe I'm going to lose a few hundred dollars either or I wouldn't be hanging in there.
MPEL bought a license from Wynn that cost more than their market cap. They may do well, or they may do nothing, or they may go belly up. Remember - 550 million market cap company, and: "The venture said in a Dec. 1 filing that it will use about $514 million to repay, with interest, a $500 million loan used to buy a Macao license from a U.S. casino mogul, Stephen Wynn. It purchased the license for $900 million in March." and "Melco PBL said in the filing that it is scheduled to open the $512.6 million, 220-table Crown Macao casino in the second quarter of 2007. The venture had a loss of $20.5 million on sales of $18.2 million in the nine months through Sept. 30." and Stanley Ho's attempt to raise 15 billion Hong Kong dollars by selling shares of his company, which controls 16 of Macao's 23 casinos, has been delayed because of a lawsuits filed by his sister, Winnie Ho. Claiming that Sociedade de Turismo e Diversoes de Macau owes her about 3 billion dollars in dividends for the past five years for her 8 percent stake, Winnie Ho, 83, has filed more than 30 lawsuits against her brother over alleged debt, defamation, and the shareholding structure of the companies.