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Afternoon Note

Busting IPO Bubbles

By Charles Payne, CEO & Principal Analyst
6/24/2019 1:28 PM


Image result for bubbles

It’s been a dull session expect for recent IPOs, which had been sizzling, but are melting down today.   Beyond ride-sharing businesses, 2019 has been a remarkable year for offerings.  The sheer number of offerings, amount raised and investor willingness to bid these names higher has been huge.

Beyond E Coli Moment?

The big move downward started with the hottest IPO of the year.  Beyond meats took a hit on June 11th when JP Morgan said it was too expensive.  The stock rebounded from that, but last week, the Center for Consumer Research suggested there could be harmful chemicals in plant-based meat alternatives.   The stock is still elevated, but selling has spilled over to all the hot IPOs.


I think most of these names will be fine, and I encourage everyone to keep them on their screens and learn the patterns and earnings execution over next few months. 

The other big loser today is Ulta Salon (ULTA) on word Amazon (AMZN) is looking to get into the business.   Heck, if live Christmas trees are fair game, anything is fair game.  I’ve studied Amazing-induced selloffs. More often than not, it increases buying opportunities, but it also adds a level of volatility in names that shift them from buy and hold stocks to trading ideas. Amazon will offer services to professionals, but it’s still hard to give a shampoo and haircut over the internet.

It’s a lackluster session, but the bias remains to the upside.  


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