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Appetite for IPOs is a Fascinating Study in Sentiment.

The appetite for IPOs is a fascinating study in sentiment. In all the market changes over the decades, that has been one constant.
Three years ago, we saw that sentiment was so skittish that it had been months since an IPO had priced above its indicated range. By October 2018, not only had the market thawed, but investors were more than willing to buy into new issues that had no record at earning money.
In the coming months, if the market holds somewhat together, we’re likely to set all kinds of records for IPOs. None of them are good longer-term signs for stocks.
On a rolling 36-month basis, we’re already seeing a near-record of billion-dollar IPOs. The only two times that (barely) eclipsed the current streak were in the fall of 2000 and spring of 2015.

The appetite for IPOs is a fascinating study in sentiment
The appetite for IPOs is a fascinating study in sentiment.

Thursday’s reception to Beyond Meat, giving a multi-billion-dollar valuation with a rousing first-day reception to a company that barely makes money and is trading at more than 40 times revenue, should be a sign that we’re not in 2016 anymore. ( This study was created by www.SentimenTrader.com ).


Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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