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The Fix loves IPO day. It has everything. The pomp and circumstance behind startup founders and CEOs ringing the bell to open trading. Jim Cramer and his squeaky voice getting all excited. Early employees wondering if they’re about to become millionaires. Early investors wondering just how much money they made. The anticipation of that first trade hitting the market. Very few things are more exciting than IPO day.

The one thing that the Fix hates about IPO day is the overreaction to success or to failure. A great IPO doesn’t necessarily mean it’s a great IPO market. It means investors really liked the company making its debut.

Conversely, bad IPO performance doesn’t mean IPOs are dead. Or that there’s no appetite for IPOs. It simply means investors weren’t buying what that company had to sell.

The most recent example of this type of thinking is Uber. Uber priced its IPO at $45 per share. Trading opened at $42 a share. Earlier this week, Uber traded at an all-time low of $37.10. And as of this writing, it’s trading at $42.94.

It’s fair to say that was not a good IPO for Uber (UBER). But it’s unfair to say tech IPOs are dead. Or that investor appetite for tech IPOs is waning. Those are the sorts of inferences that get the breathless media – and investors – into trouble.

Uber lost $1.8 billion in 2018. Until Uber’s other business lines (Uber Eats, Uber Freight, etc.) substantially increase their revenue, its pathway to profitability lies in either charging riders more money or replacing drivers with autonomous vehicles.

So investors have every right to be worried about Uber. Just like they had every right to like the fact that Zoom, another tech company that IPO’d this year, was profitable. Zoom priced at $36 per share. It’s currently trading at $83.28. That’s a successful IPO.

Investors liked Zoom’s profits and future. So its stock went up. Investors didn’t like Uber’s pathway to profitability. So its stock went down. Don’t believe any of the crazy stories in the media telling you tech IPOs are in trouble. That’s simply not the case.

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