Twitter's IPO is the biggest tech IPO since Facebook. A new guide to playing the IPO properly has been published at http://www.howtoinvesthq.com/investing-in-the-twitter-ipo-what-you-must-know/.
Peter Brown, owner of http://www.howtoinvesthq.com/, recommends that would-be investors learn a bit more about Twitter before investing heavily into the IPO. Too often investors are burned by IPOs because they know little about the company and do not understand what they are buying. In his investing guide, Peter Brown warns that internet companies are extremely vulnerable, and investors that do not take the time to learn more about Twitter will be the last to know if the company goes downhill. Tech companies are often boom and bust, so investors need to closely follow the stock in order to better time their exit from the position to maximize return and prevent losses.
Another concern raised in the new guide about the Twitter IPO is the company's current profits are nonexistent. While Twitter has been able to grow their revenue rapidly, they are still losing millions of dollars each quarter. Even if Twitter continues to grow rapidly, it does not mean they will necessarily be able to turn a profit in the near future. As a result, Peter Brown recommends investors consider waiting until Twitter is able to make money before buying into the stock.
For those that are going to bid on the IPO anyway, Peter Brown issues one last word of warning in his new guide: be prepared to buy again if the stock should crash after the IPO. Investors buying into IPOs make a big mistake by putting all their money into the IPO and are stuck with large losses if the stock declines in price following the IPO. A better solution would be for investors to put some of their money into the IPO, then if the stock drops in the following months or weeks, the investor is able to purchase additional shares at this lower price in order to reduce their average share purchase price. This will lead to much larger returns if the company eventually grows into its IPO and share prices begin to rise again.
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