Pain can teach us valuable lessons.
For instance, when I was a little kid, I burned my hand grabbing a hot pot on the stove. I didn’t need to learn that lesson twice.
But some lessons are hard to learn, no matter how painful they are.
For example, investing in IPOs.
IPOs have performed terribly lately. Investors have lost a fortune betting on them. But still, folks keep jumping at the chance to invest in them.
If that sounds like something you’d do, this essay is for you.
Today, my goal is to explain why you should avoid investing in IPOs…
And then I’ll show you where to invest instead!
The 2019 IPO Bonanza
For the past few years, there haven’t been many IPOs…
But this year, they’ve been coming fast!
In the past few months alone, a flurry of high-profile, multi-billion-dollar companies have gone public — companies like Lyft (LYFT) and Uber (UBER).
These companies generated extraordinary buzz before their IPOs. So investors jumped at the chance to invest in them.
Well, that was a mistake…
IPO Investors Are Getting Robbed
For example, the IPOs of Uber and Lyft have been train wrecks.
Uber quickly tanked by about 15%, and is still struggling to find its footing.
And Lyft is down nearly 30%.
The thing is, this dismal performance is nothing new.
IPOs have been losing their luster for years now.
That’s because startups are staying private longer these days...
Essentially, they spend years and years building their business before they go public.
So when they do finally IPO, their market caps are already at sky-high levels.
Bottom line: once these stocks start trading, there’s very little upside left…
But clearly, there’s plenty of downside!
Where the REAL Money is Made
As Matt explained here yesterday, the real money is made by investors who got into these stocks before their IPO — back when they were still private companies.
For example, even though Lyft’s stock is down by 27% right now, those who got in when it was still private are sitting on a massive gain:
Lyft’s earliest investors have made an estimated 3,833x their money. That’s enough to turn a $1,000 investment into nearly $4 million.
It’s a similar story for Uber…
Public investors have lost a bundle, but private investors are sitting on vast gains:
Uber’s earliest investors have made an estimated 13,600x their money…
That’s enough to turn a $1,000 investment into $13.6 million!
Profit Lesson Learned?
As you’ve learned today, you should avoid investing in IPOs!
Not only are these investments failing to deliver profits, but they’re likely to hand you big losses.
To earn big profits, you need to get into these companies well before their IPOs.
For instance, we introduced our readers to ReWalk Robotics before it IPO’d — and once it went public, they could have pocketed close to 400% profits in just one year.
It’s a similar story for the Elio Motors IPO, where our readers were able to earn a 325% gain in just 30 days.
Meanwhile, one of our most recent recommendations, CNS Pharma, just filed to go public…
And when it opens for trading, our readers will be guaranteed a double-digit profit!
Your Chance for Pre-IPO Profits
If you missed out on those opportunities, don’t worry.
Just a few weeks from now, we’ll be issuing a new pre-IPO investment recommendation.
And when we do, you’ll have the chance to get in before it goes public — and hopefully cash out for extraordinary gains!
So stay tuned…