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108 votes
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I bought my first shares in life and they dropped 25% in a very short time. What to do?

What were my mistakes? Buying individual stocks. Over 80% of all professional fund managers are doing worse than a simple S&P 500. These are people who get 100s of 1000s of dollars per year for ...
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  • 6,989
63 votes

I bought my first shares in life and they dropped 25% in a very short time. What to do?

I would like to know in retrospect what I and other Coinbase stock buyers did wrong. What are the lessons learned for my future? What were my mistakes? You bought a meme stock during the manic phase ...
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  • 73.6k
48 votes

I bought my first shares in life and they dropped 25% in a very short time. What to do?

You are just starting to learn about investing, so it helps to go over the fundamentals. Typically when an individual has a small amount of spare cash they will put it into a savings account at a bank....
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  • 1,464
34 votes

I bought my first shares in life and they dropped 25% in a very short time. What to do?

What are the lessons learned for my future? What were my mistakes? Specific lesson learned about Coinbase? You bought it because it was in the news. Specifically, you bought it because of favorable ...
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31 votes
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Must a company have a specific number of employees to do an IPO?

While there is no legal reason to have a minimum number of employees, there can be a practical reason. They want to look like a good solid investment so that investors will give them money, which ...
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26 votes

Must a company have a specific number of employees to do an IPO?

No, there is no minimum employee limit in order for a company to initiate an initial public offering.
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  • 48.3k
23 votes

Why would a company prevent their employees from selling their pre-IPO equity?

One reason for a Private company to restrict the number of shareholders is that is there are additional SEC reporting compliance requirements once you exceed the threshold of 2,000 shareholders / 500 ...
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21 votes

How does a public company issue new shares without diluting the value held by existing shareholders?

Let's say the company has a million shares valued at $10 each, so market caps is $10 million dollar = $10 per share. Actual value of the company is unknown, but should be close to that $10 million if ...
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  • 20.8k
21 votes

Does an IPO mean a company is going public or is already public?

I know IPO means that particular company, regardless of the country, is offering some quantity of their stocks to the public via stock exchange. An IPO is an initial Public offering. They are taking ...
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20 votes
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How do companies get money from being listed publicly?

Being listed publicly doesn't get a company any money. Getting the listing is what does it: the company sells new shares in an Initial Public Offering (IPO), the underwriter takes its cut of the ...
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  • 5,323
20 votes

I bought my first shares in life and they dropped 25% in a very short time. What to do?

One thing you should take from this experience is how much you need to consider your choices of saving instruments. If you are going to invest in shares of a single company then you should assure ...
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  • 823
17 votes

I bought my first shares in life and they dropped 25% in a very short time. What to do?

Be aware of the sunk cost fallacy. The money you lost is gone and nothing you can do will bring it back. What you do now should be largely independent of that. Let's say you had the money you have ...
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15 votes

Does an IPO mean a company is going public or is already public?

It's all in the name: Initial Public Offering (IPO). Before that, it's a private company. If an already public company issues more stock, it's called a secondary offering.
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12 votes
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what's the difference between money raised in an ipo and its valuation?

A company generally sells a portion of its ownership in an IPO, with existing investors retaining some ownership. In your example, they believe that the entire company is worth $25MM, so in order to ...
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  • 113k
11 votes

Why would a company prevent their employees from selling their pre-IPO equity?

Typical IPOs tend to have a lock-up period which prevents insiders (founders, employees, venture capitalists) from selling their shares for some amount of time after the IPO. The waiting period tends ...
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  • 73.6k
10 votes

How does a public company issue new shares without diluting the value held by existing shareholders?

In simplest terms, when a company creates new shares and sells them, it's true that existing shareholders now own a smaller percentage of the company. However, as the company is now more valuable (...
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  • 109
10 votes
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Why should a company go public?

You go public to raise money, to invest in the business and/or pay off the existing shareholders. It's really as simple as that. The advantage of being public is that your shares can easily be bought ...
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9 votes
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Buying shares in employer's company during IPO

I think of these things in terms of risk. Investing in individual stocks is risky, and investing in brand new individual stocks is riskier still. However, the payoff can be quite high. The fact ...
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8 votes

Does an IPO mean a company is going public or is already public?

Since you didn't specify a country, I'll answer on the basis of the UK, given that it is a major financial center. Just bear in mind that exact definitions may vary in other jurisdictions. It is a ...
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  • 2,426
7 votes

How does a public company issue new shares without diluting the value held by existing shareholders?

As others have posted, the company gains capital in return for its new shares. However, the share price can still fall. The problem is that the share marked is affected by supply and demand like any ...
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7 votes

What does investment bank risk during IPO?

Investment banks don't have to buy anything. If they don't think the stock is worth buying - they won't. If they think it is - others on the secondary market will probably think so too. Initial ...
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  • 127k
7 votes

What Happens to Cofounders' Shares when they IPO?

A company typically goes public in order to bring in additional capital. In an IPO, the company (through its officials) will typically do so by issuing additional shares, and offering to sell those ...
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  • 4,529
7 votes
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Is Volvo a public company?

There are two different companies named "Volvo." The publicly-traded company with ticker symbol VOLV-B is called Volvo Group, or AB Volvo. They primarily build trucks, buses, and construction ...
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6 votes
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What happens on the NYSE during an IPO such that the first trade may be hours after the opening bell?

When a company does an Initial Public Offering it is making its shares available for purchase by members of the public for the first time. There are two markets - the "primary" and the &...
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  • 4,978
6 votes

Can an IPO be cancelled if not successful?

IPOs are cancelled for a number of reasons: The company finds a better funding option than an IPO Other recent IPOs have not done well and weaker sisters are pulled Market nervousnness: The market is ...
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  • 73.6k
6 votes

To the employer, is equity more or less expensive than payroll?

It depends. On one hand, paying you in shares can be almost free for the company. The directors just have to pay for the administration costs of issuing you the shares. If they are paying you shares ...
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  • 9,182
6 votes

I bought my first shares in life and they dropped 25% in a very short time. What to do?

There's already plenty of answers, but I'll try to help you with the analysis part. How to understand and accept the results. And how to make decisions in the future. Now my loss at 25% It's ok for ...
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  • 661
5 votes
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How much of a company goes public?

Anytime a company takes investments they have to decide what portion of the company is for sale. If they decide to sell 25% of the company through an IPO, then 75% of the company remains in the hands ...
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5 votes

Can I buy IPO stock during the pre-market trading on the day of IPO?

The first moment of trading usually occurs even later than that. It may take a few hours to balance the current buy/sell orders and open the stock. Watch CNBC when a hot IPO is about to open and you'...
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5 votes

Must a company have a specific number of employees to do an IPO?

Working for a lot of startups, I have seen this cycle. Really it has little to do with making the IPO look good because of number of employees, and is more about making the IPO look good because of ...
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