It has become a phenomena that every time an IPO is launching, I will receive a few calls asking if it is a good buy. Investors always have this interesting perception that they buy IPO at discounted price of the stock. Many investors DREAM to become overnight new rich by buying IPOs.
The most recent IPO is Perennial China Retail Trust (PCRT), which deals in retail space in China. The IPO is planning to raising S$776.2 million with units priced at S$0.70 each. This is significantly lower than the $1 per unit which it had planned previously. It were shelved due to concerns of slow growth in China as well as the worsening debt situation in Europe.
Let’s just exam the fates of the hot IPOs in the past; Green lines refer to Straits Times Index, Orange Lines represent the performance of the IPOs.
Hutchison Port Holdings Trust
So I will leave it for you to decide yourself on the fate of Perennial China Retail Trust.
But wait, isn’t LinkedIn IPO which just doubled its price since Thursday debut? Of course, check out who are the winners of the game.