Today I see a surge of visit to one of my blog entries last month, Sheng Siong seeks up to S$141m in IPO. It is obviously because Sheng Siong made the headlines in today’s Straits Times, “Sheng Siong dangles dividend as carrot in IPO”.

I always caution investors against investing in IPOs not due to the fundamentals of any new IPO company, but because I believe the IPOs in general is oversold and investors often undermine the risks that they are taking.

After my previous blogs, I received an email from a Teenager asking me for opinions about Sheng Siong IPO.Here is what he wrote:

“I would like to know from you whether this a good buy or bad buy. I am actually a teenager and this is my first time buying stocks.”

I was disturbed by the fact that the buyers for the IPO could be a student or a retiree who may not understand what they are buying into.

Anyway, the “indicative price range was S$0.36 to S$0.40 apiece”. Based on today’s news, Sheng Siong will offer 351.5 million shares only at S$0.33 apiece at the launch of the IPO. In my opinion, it shows the market sentiment is bad and the interest in the shares is relatively low. If your intention is hit the jackpot,  you really should think about it twice.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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