Ouch, ouch ouch, DPO never again!

[kgtest]

So I made a mistake. I'll be the first to admit. My pride and finances took a small hit.

I invested in WORK (Slack Technologies) DPO Direct Public Offering. Got in at 40 the morning they went Public...and unfortunately today I am getting out at around 20.

Lesson learned. Stick to my damn Asset Allocation strategy along with buying the whole market. Thankfully I only invested 1% of my total portfolio in this seemingly unprofitable and terribly managed DPO.

Learn from my mistake! I thought I had enough info to make an educated buy but I was soo so wrong. Mrs kgtest is not happy with me.


Happy Friday!!

 

[OldShooter]

We've all done it. Life is like school except first you get the test and then you get the lesson.

 

[CardsFan]

We've all done it. Life is like school except first you get the test and then you get the lesson.

I have to remember this one!

 

[RobbieB]

Don't feel bad, I went "all in" for a grand on an Elio.

 

[Dalmore]

My record with individual stocks...buy high, sell low. It is a hard lesson to learn, and some of us (me) have to keep re-learning it.

 

[prudent_one]

You're not alone, I had a handful of co-workers who think Slack is the greatest software ever and were sure the stock was going to be a big hit so they jumped in on the initial offering. They learned that there isn't a for-certain correlation among product quality, product popularity, and stock prices. I still hear them complaining about how "wrong" the market is on the stock.

 

[Car-Guy]

Well if it was only one share it was a cheap lesson. 100 a little pain. 1000 ouch. 10,000 or more OMG .

 

[MichaelB]

So I made a mistake. I'll be the first to admit. My pride and finances took a small hit.

I invested in WORK (Slack Technologies) DPO Direct Public Offering. Got in at 40 the morning they went Public...and unfortunately today I am getting out at around 20.

Lesson learned. Stick to my damn Asset Allocation strategy along with buying the whole market. Thankfully I only invested 1% of my total portfolio in this seemingly unprofitable and terribly managed DPO.

Learn from my mistake! I thought I had enough info to make an educated buy but I was soo so wrong. Mrs kgtest is not happy with me.


Happy Friday!!

Being able to talk about it, both with the Missus and here, is a good sign. We all have done dumber things, although not everyone ‘fesses up.

IPIC theaters did their IPO early last year, and offered DPO shares to customers with memberships. It looked appealing.

Last week they declared bankruptcy.

 

[euro]

Yeah, I doubled down twice on MCI-Worldcom on the way down to zero.....

 

[jazz4cash]

Ya never know. It could pay off in the long run. I/DPOs are so over-hyped anything could happen.

I’m looking at a big loss on MJ, an ETF of cannabis companies currently down 30% so I’m doubling down, of course!

 

[pb4uski]

Good chance to harvest some gains at no tax since the those gains are offset by the WORK losses.

 

[Car-Guy]

"One" of my big ones was Enron. Dropped so fast it defied the laws of gravity.

 

[NW-Bound]

I just learned of this stock from this thread. I have never bought any IPO or DPO. But that does not mean I have not lost 50% on a single stock.

In fact, even if you only hold MFs, you also have lost plenty more on stocks held by the MFs and you just don't know about it.

Lemme see. GE is still a component of the S&P 500. High of 41+, and hanging on at 9 today. There are more like it in the S&P, but the smaller companies do not get the headlines.

The saving grace is the OP only put 1% of his investable assets in WORK. Yep, diversification is how we survive. The OP should not beat himself up too badly.

 

[triangle]

If you only invested 1% then you did not make a mistake, you were pretty conservative and prudent. Especially if this was a product and company (management team & financials) you were knowledgeable about, which would normally generate oversized optimism.

Based on anecdotal observations (no data to back this up) it does seem that the stock prices of young/new companies are much more volatile than more mature companies. That it often takes many quarterly reports before investors get comfortable with the predictability of future revenues and the management team.

 

[Lakewood90712]

I would question " Invested In " . Speculated in ? Before buying any stock, know specifically why YOU are buying it, and any sale, why are you selling it.

Most IPO's drop after the initial spash. 6 mo out is usually a better time to evaluate for purchase.

 

[target2019]

1/10 of 1% would be a better rule of thumb. Or nothing at all.

 

[PoorOldCountryBoy]

So I made a mistake. I'll be the first to admit. My pride and finances took a small hit.

I invested in WORK (Slack Technologies) DPO Direct Public Offering. Got in at 40 the morning they went Public...and unfortunately today I am getting out at around 20.

Lesson learned. Stick to my damn Asset Allocation strategy along with buying the whole market. Thankfully I only invested 1% of my total portfolio in this seemingly unprofitable and terribly managed DPO.

Learn from my mistake! I thought I had enough info to make an educated buy but I was soo so wrong. Mrs kgtest is not happy with me.


Happy Friday!!

Happens to everyone hope it was a small amount. Keep in mind your stock dropped 50%. It is quite normal to have the whole market correct 30-40% every few years. How would you feel then?

If the answer is bad, adjust your asset allocation now while you can.

 

[FIRE'd@51]

Why not buy more? If you liked it at 40, you should love it at 20.

 

[joeea]

I invested in WORK (Slack Technologies) DPO Direct Public Offering. Got in at 40 the morning they went Public...and unfortunately today I am getting out at around 20.

Why are you getting out now? A desire to lock in a loss?

I guess you learned a not too expensive lesson. Stuff happens.

The title you use seems to suggest that you won't speculate on DPOs again, yet you wrote "this seemingly unprofitable and terribly managed DPO" which seems to imply that you think this particular DPO is an outlier.

 

[karen1972]

You are not alone, same rationale, my honey LOVES it, and I had done so well on my other IPOs that I just threw some money at it. The biggest issue is that Microsoft has been so agressive since the IPO which makes it a bad bet and I too got out at a lost.

For me it is still a win because I have another position with a huge gain I want out of and this loss will be able to allow me to leverage almost completely out of that and still keep my ACA subsidy.

 

[OldShooter]

I would question " Invested In " . Speculated in ? Before buying any stock, know specifically why YOU are buying it, and any sale, why are you selling it. ....

1/10 of 1% would be a better rule of thumb. Or nothing at all.

Why not buy more? If you liked it at 40, you should love it at 20.

Why are you getting out now? A desire to lock in a loss? ...

Why the snark? @kgtest is doing the community a favor here, particularly the less experienced investors who typically read only about people's IPO "wins" and thus get a very distorted view of IPO investing.

@kgtest is also demonstrating the value of diversification. Another good lesson for less experienced investors.

Re "locking in a loss" I'd suggest reading Richard Thaler's "Misbehaving" to understand this particular bit of fallacious thinking. To pretend that we avoid a loss by not selling stems from our (human) aversion to losses and leads to bad investment decisions. It's similar to the sunk cost fallacy.

 

[joeea]

Re "locking in a loss" I'd suggest reading Richard Thaler's "Misbehaving" to understand this particular bit of fallacious thinking. To pretend that we avoid a loss by not selling stems from our (human) aversion to losses and leads to bad investment decisions. It's similar to the sunk cost fallacy.

Which is exactly why I asked.

If you believe the stock will continue to decline, then selling is a reasonable option.
If you believe it will recover even a little, then perhaps selling is not so reasonable.

 

[OldShooter]

... If you believe the stock will continue to decline, then selling is a reasonable option.
If you believe it will recover even a little, then perhaps selling is not so reasonable.

Yes, of course. But in neither case is the purchase price ("recover") relevant to the decision. If you expect a stock to go down, sell. If you expect it to go up, buy.

A decision to hold a stock on a particular day is exactly the same as a decision to buy it on that day.

 

[Lakewood90712]

Why the snark? @kgtest is doing the community a favor here, particularly the less experienced investors who typically read only about people's IPO "wins" and thus get a very distorted view of IPO investing.

@kgtest is also demonstrating the value of diversification. Another good lesson for less experienced investors.

Re "locking in a loss" I'd suggest reading Richard Thaler's "Misbehaving" to understand this particular bit of fallacious thinking. To pretend that we avoid a loss by not selling stems from our (human) aversion to losses and leads to bad investment decisions. It's similar to the sunk cost fallacy.

Nothing snarky at all. If buying an equity as an investment , the reasoning for the purchase and sale is required, otherwise it's pure speculating. Nothing wrong with speculating for those who want to chase shooting stars, but it's not investing.

 

[joeea]

Yes, of course. But in neither case is the purchase price ("recover") relevant to the decision. If you expect a stock to go down, sell. If you expect it to go up, buy.

A decision to hold a stock on a particular day is exactly the same as a decision to buy it on that day.

Agreed. That was the point. Sorry it was confusing for you.