Investing in a Tech Pharma IPO is in my opinion, "full of potential", especially in this IPO market we're seeing. There has been a few hints of perhaps a Tech Pharma IPO in the next few weeks that has investors clamoring. These types of situations (returning market) and the addition of a good solid Tech Pharma company could be very interesting. I for one have made substantial profits investing in Tech Pharma IPOs.
When looking for a solid IPO, one should follow these types of guidelines:
1. The Use of Proceeds statement: This document issued by the IPO at hand is very important and is extremely telling. In this section of an IPO prospectus (the S-1), if a company has stated the following: "We expect to use the net proceeds for general corporate purposes, including working capital, capital expenditures and possible acquisitions. We may also use these net proceeds to repay all or a portion of our senior secured credit facility" or something similar, you know you're on to something special.
This is very important and shows that the proceeds aren't just going to selling stockholders.
That my friends, is a recipe for disaster and usually sends an IPO through the floor.2. The underwriters for an IPO are the critical component in which I believe will make it a pure and simple success. Being in this business now for over 10 years, I've seen my share of good bad and ugly underwriters. In my opinion the good are underwriters such as Citi, JP Morgan and Credit Suisse
3. Earnings: This is the last part of the research you need to know in order to hopefully make a killing with IPOs. Without earnings, your IPO is dead in the water. Obviously, being a private company, earnings aren't always that available, but check the S-1 filing and it will all be there.
How to Make Huge Profits With a Tech Pharma IPO