Is This IPO Tactic Creating the Next Bubble?
Nov 29th 2011 10:21PM
Updated Nov 30th 2011 4:32PM
The following video is part of our "Motley Fool Conversations" series, in which Motley Fool editors Austin Smith and Andrew Tonner discuss emerging trends in their favorite companies.
In today's edition, Austin and Andrew discuss the recently popular (and dangerous) strategy newly public tech companies are using called the "low float" strategy. Under this strategy, companies release a low percentage of their company to the market, which can easily result in a highly inflated market cap. As evidence, consider that 20 of the 25 most recent tech IPOs are already below their IPO offer price.
To read about a Motley Fool favorite stock that IPO'd this year and didn't use the low float strategy, check out our special free report: "The Hottest IPO of 2011." In it you'll get a recent IPO we love that's cashing in on the emerging market. You can access your copy today at no cost at all. To get instant access to the IPO we love, click here -- it's free!
At the time this article was published Neither Austin Smith nor Andrew Tonner owns any shares of the companies mentioned above. The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Google and Zillow. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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