5 Tips for Investing in IPOs
Always read the prospectus
It is essential to read the prospectus as it projects the company’s risks and opportunities and also the recommended uses for the money collected by the IPO. If the prospectus states that the money will be used up to repay loans or buy equity etc then its red signal. But if the money invested would be used for research, marketing or expanding into new markets then it would be right to invest in that company. So it’s important to pay attention at the positive future earnings outlook which includes reading the accounting figures properly.
