GRAND RAPIDS, Mich. — What exactly is an IPO? And is it advisable to invest? To get those answers 13 ON YOUR SIDE enlisted the help of Gregg K. Dimkoff a Professor of Finance from Grand Valley State University.
IPO stands for initial public offering, it's when a corporation decides to sell shares to the public for the first time. But are they a good idea to take part in? According to Dr. Gregg, K. Dimkoff, the answer is no.
Dimkoff says it's like gambling. He says that generally speaking, after shares are bought, the prices actually drop. According to Dr. Dimkoff the best alternative is to pick notable companies that are making profits rather than trying to hit a "home run."
For more information about IPOs, check out these resources:
- What is an IPO? (Investopedia)
- What is an IPO? How They Work and Should You Invest In One (Listen Money Matters)
- Investing in IPOs and other equity new issue offerings (Fidelity)
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