How to Determine If a New IPO Is Worth the Risk

Phil Town advises to pump the breaks a bit before investing.

Free Book Preview Money-Smart Solopreneur

This book gives you the essential guide for easy-to-follow tips and strategies to create more financial success.
2 min read
Opinions expressed by Entrepreneur contributors are their own.

In this video, Entrepreneur Network partner Phil Town explains the pros and cons of investing in an initial public offering (IPO). In order to determine if you should invest in an IPO, consider the following:

  1. Is it worth the price? 
  2. Will the price plummet? Uber and Lyft's stock prices took extreme dips after they went public in 2019. 
  3. Are you prepared to bet on the unknown, considering there is no background information on the new company?

At the end of the day, Town says there is no harm in keeping a new IPO on your watchlist, but you should exercise logic and reason before you invest in it. 

Click the video to hear more. 

Related: Why Millionaires Don't Invest in These Things

Entrepreneur Network is a premium video network providing entertainment, ewitducation and inspiration from successful entrepreneurs and thought leaders. We provide expertise and opportunities to accelerate brand growth and effectively monetize video and audio content distributed across all digital platforms for the business genre.

EN is partnered with hundreds of top YouTube channels in the business vertical. Watch video from our network partners on demand on RokuApple TV and the Entrepreneur App available on iOS and Android devices.

More from Entrepreneur

We created the SYOB course to help you get started on your entrepreneurial journey. You can now sign up for just $99, plus receive a 7-day free trial. Just use promo code SYOB99 to claim your offer.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Entrepreneur Store scours the web for the newest software, gadgets & web services. Explore our giveaways, bundles, "Pay What You Want" deals & more.

Latest on Entrepreneur