r/stocks
Sobering thoughts about the upcoming AIs IPOs
The author warns that upcoming AI IPOs might follow the same hyped and unsustainable playbook as WeWork, leading to eventual crashes.
- AI IPOs are being driven by hype and lofty promises rather than actual revenue or sales.
- The playbook mirrors the WeWork bubble, where valuations skyrocketed before reality set in and the stock collapsed.
- Retail investors are being lured in by headlines about high-profile investors, blinding them to the true potential of the technology.
Interesting perspective about the upcoming AI IPOs. This YouTuber compares these IPOs with the hype that preceded WeWork's (and other hyped start-ups) collapse, noting a a similar playbook:
- Attract high-profile investors with lofty predictions about changing the world and benefit the human race.
- News about high-profile investors investing rises the valuation of the company, regardless of actual sales/revenue. The skyrocketing valuation makes headlines and the "common people" take note, wishing a share of the riches.
- Once there are no more private investors willing or able to invest, an IPO is declared and hyped as a great opportunity to share the riches of the hyper-valued company.
- Reality sets in, the dreams and promises turn out unrealistic and based on wishful thinking, and the stock price collapses.
I think it's worth a listen, not just for a perspective on the incoming AIs IPOs, but as a good perspective about how hype blinds people regarding a company's or technology's true potential.
Time to head to the sidelines . Let the retail SpaceX investors get wiped out and then jump back in. I think the correction should be priced in by then.
Well... Yes.
It's been my understanding that an IPO is primarily an exit event for early investors.
If you're seeking to buy in during the IPO, you're already too late.
Historically, most IPO's are not worth it. The stock drops normally right after the IPO and takes awhile to recover.