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The $756 million Dropbox Inc. (Nasdaq: DBX) initial public offering was a huge success, soaring 35% higher than its $28.48 debut price on the day.
It was the biggest, richest tech IPO since Snap Inc. (NYSE: SNAP) shares hit the market last year, and it has everyone "talking IPO" again.
What is it about a Silicon Valley IPO that makes investors go all starry-eyed?
I mean, I like unreasonably large piles of money as much as the next guy... but overhyped IPOs of the moment just aren't the way to make a pile yourself.
Big-game IPO investing, where it's even possible, is almost always a loser for anyone who isn't an underwriter, institution, or corporate insider.
In fact, it's much worse than that: If you do somehow manage to get allotted shares of the Next! Big! Deal! ...
...you're probably about to be taken for a ride.
About the Author
Tim Melvin is an unlikely investment expert by any measure. Raised in the "projects" of Baltimore by a single mother, he never attended college and started out as a door-to-door vacuum salesman. But he knew the real money was in the stock market, so he set sights on investing - and by sheer force of determination, he eventually became a financial advisor to millionaires. Today, after 30 years of managing money for some of the wealthiest people in the world, he draws on his experience to help investors find "unreasonably good" bargain stocks, multiply profits, and build their nest eggs. Tim tirelessly works to find overlooked "hidden gems" in the stock market, drawing on the research of legendary investors like Benjamin Graham, Walter Schloss, and Marty Whitman. He has written and lectured extensively on the markets, with work appearing on Benzinga, Real Money, Daily Speculations, and more. He has published several books in the "Little Book of" Investment Series and a "Junior Chamber Course" geared towards young adults that teaches Graham's principles and techniques to a new generation of investors. Today, he serves as the Special Situations Strategist at Money Morning and the editor of Peak Yield Investor.