Unprofitable Companies Raised Enormous Capital in 2019, Attorney Laura Anthony Explains Why and How

WEST PALM BEACH, Fla., Jan. 2, 2020 /PRNewswire/ --A Somewhere, way in the back of your closet, you may have a white cotton sport jacket or a business suit with shoulder pads. They're garish, woefully out of style, but you can still remember when they were the height of couture, and wearing them felt so very natural. Every time you considered parting with these treasures from the past, you just couldn't pull the trigger.A A For reasons unknown, style being a fickle mistress, you wake up one day and you see one or two of the "in" crowd wearing parachute pants and moon shoes with Velcro closures. Voila, everything old is new again. Fashion and finance share the same fundamental characteristics. People either forget how ridiculous some of these clothes and trends actually were, or, inversely, they remember them as being better than they actually were. Hence, history repeats itself over, and over, and over again. Recently it seems that investors have either forgotten the gut-wrenching heartbreak of the dot-com bubble or have come to miss the radical volatility so much that they're back for more. In the past year, unprofitable companies such as Uber Technologies Inc., Lyft Inc., and Pinterest Inc. have collectively raised more capital by going public than has been raised in any other year since the year 2000. There's an adage in finance that provides insight into IPOs: the one's you want you can't get, and the ones you can get you don't want. Just like the final days before the dot-com crash, these underwater companies are overvalued. Analysts are often overly optimistic, putting their thumbs on the scale so to speak. Ultimately, the reason why these market entrants flopped on the open doesn't matter. The only thing that investors care about is that the corresponding share prices sank like a rock in a pond.
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