Wait for post-IPO hype to cool
The guests argued that high-quality businesses often make poor investments at IPO, and investors should wait for fundamentals to catch up with the stock price.
The argument
The speakers compared SpaceX's current market debut to the historical IPOs of Uber and Airbnb, which both experienced significant post-IPO declines before becoming attractive, viable long-term investments.
The thesis, stress-tested
✓ What validates it
- ✓A significant decline in stock price post-IPO while underlying business fundamentals and revenue growth remain stable
▸ Risks discussed
- ▸Missing out on early momentum if the stock does not experience a post-IPO correction
Hear it yourself
"Jason Brett (3zero thirty seven): We've actually invested in two companies that in hindsight were pretty wildly overvalued at IPO with Uber and Airbnb, but the difference is that we bought them after the business fundamentals had caught up to the stock price."
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