Two Of Last Week’s ‘Hot’ IPOs, Vivint Solar & Yodlee, Plummet Within First 72 Hours.

Anura Guruge, June 8, 2013.

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Anura Guruge


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Click to access “MarketWatch” coverage for each.

Red track on chart is that for SPX — S & P 500 index.

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Two classic examples that all IPOs don’t do well. Even Alibaba is down from its first day — albeit not from the $66 that some lucky buggers were able to get it at, that being the IPO price.

I was aware of both of these IPOs and ‘tracked’ them given that Fidelity told me that I might have a slim chance of getting an IPO allocation.

I stayed clear of VSLR because it was solar and I had read enough bad things about that sector. I am GLAD I did. But there was something very scary about what happened with that IPO. The day after the IPO, “Seeking Alpha” (which is a bunch of unregulated, amoral, unethical cowboys as far as I am concerned) published an article saying that VSLR was “destined to destroy shareholder wealth“. The stock plummeted. They claim that they could not publish this article, i.e., that it was on embargo, till after the IPO. Please. I feel bad for all those that got 3rd degree burns.

I was interested in YDLE. Most IPOs to do with ‘the cloud’ have a pop — because people think the cloud is sexy and strategic, though in reality we have been exploiting cloud for the last 10 years, IF not more. Some of you, I know, can’t even remember ‘the network is the computer’. I do. I decided to beg Fidelity for 2 shares at the IPO — that being all that I could afford at $12 a share.

Well they didn’t give me those 2 shares — probably because you have to ask for allocations in blocks of 100!

I am GLAD that Fidelity didn’t give me those 2 shares.

I can buy YDLE in the open market now — without any flipping restrictions.

So I am just giving YOU a heads up because unlike the clowns on “Seeking Alpha” I am not out to get you so that I can make some money. Maybe that is where I go wrong.