Stocks

How to Determine If a New IPO Is Worth the Risk

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

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