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Why Are Investors And Wall Street Picking Up Unprofitable IPOs?



The IPO market has always been interesting. IPO investors capitalize on high growth companies and might strike a fortune in the long-run if they stay invested in successful companies.

And they’re the ultimate cash-out play for VC investors that came in early. But even getting in early in the IPO stage can be insanely lucrative.


Facebook [FB] debuted on the stock exchange in May 2012 at $38 per share. The stock reached an all-time high of $218.62 in July this year, providing investors with a return of 475% in just over six years.

But few companies are as successful as Facebook. The social media giant had already reported a net income of $1B in 2010. Last year, the net income rose close to $16B.

That said, the trend this year seen an overwhelmingly large number of private unprofitable company hit Wall Street to major fanfare.

Over 80% of IPOs unprofitable

According to this report from the Wall Street Journal, 83% of IPOs listed in the United States in 2018 have lost money in the 12 months leading to their listing.

This number is even higher compared to the dot-com bubble, where 81% of IPO listing firms were unprofitable.

There are some investors like Kevin Landis, the chief investment officer from Firsthand Capital Management, who are wary about investing in loss-making companies. “The lesson from 2000 is don’t chase what everyone else is chasing,” he’s said.

Translation: Don’t believe the hype. But is he right?

These IPOs have generated significant returns

The report highlights that investors have been rewarded for pumping money into loss-making IPOs this year. The stock prices of money-losing firms in the United States have risen by an average of 36% this year.

Surprisingly, this is higher than the average stock returns of 32% for profitable IPOs this year. Compare this with the 10% returns of the S&P 500 ETF [SPY] and you know that the difference is huge.

Exponential returns by IPOs

Investing in companies is not always about profitability. Sure, everyone would like to strike gold by getting an opportunity to invest in a high growth and profitable company like Facebook.

Amazon [AMZN] which is the second largest company as per market cap, reported losses several years post its IPO. Amazon now consistently reports profits after it expanded into other business segments such as Cloud Services.

So what is it that attracts investors to these stocks? Investors are buoyed with the total available market opportunity of certain companies. They value revenue growth over net income and continue to pump in capital.

Investors hope that companies will turn profitable over the long run. Spotify [SPOT] was listed in April 2018. The stock reached an all-time high of $198.99, gaining over 33%. Investors believe the growth in music streaming to drive company revenue over the next few years.

The cannabis market is also estimated to reach $32B in 2020, up from $9.5B in 2017. This has driven the stock price of Tilray Inc. [TLRY] by 550% in less than three months. Eventbrite [EB] had a price and of $21 to $23 per share and the stock rose 60% higher on its first trading day.

Not every bet is successful

There is, however, a serious downside for investors of these companies in case it fails to meet analyst and investor forecasts. Snap [SNAP] has fallen close to 47% this year driven by a declining user growth.

The loss-making IPOs are generally overvalued due to optimistic assumptions and come crashing down if they fail to deliver. GoPro [GPRO] and Fitbit [FIT] are two such companies that have burnt significant investor wealth.

The last time investors were this optimistic about loss-making tech companies, it ended in a horrific bloodbath with the dot-com bubble. Let’s hope Wall Street is proved right this time around.


Airbnb Experiences: 5 Easy Ways To Make Extra Cash Today



Airbnb Experiences: 5 Easy Ways To Make Extra Cash Today

Airbnb is a great way to earn money by renting out your home or apartment.

However, did you know that you can also make money by offering experiences on Airbnb? Here are five easy ways to make extra cash today by creating and offering Airbnb experiences.

1. Offer a food tour

If you love food, why not share your passion with others? Create a food tour experience in your city, showcasing the best local cuisine. You can offer a walking tour or a bike tour, and include stops at local markets, restaurants, and cafes. This is a great way to meet new people and earn money at the same time.

2. Teach a skill or hobby

Do you have a skill or hobby that you’re passionate about? Share your knowledge with others by offering an experience on Airbnb. You can teach anything from photography to cooking to yoga. People are always looking for new experiences, and they’re willing to pay for them.

3. Host a cultural event

If you come from a different culture, why not share it with others? Host a cultural event, such as a traditional dance, music, or art class. This is a great way to showcase your culture and make some extra cash.

4. Offer a nature experience

If you live in a beautiful area, offer a nature experience on Airbnb. You can offer a hiking tour, a kayaking trip, or a birdwatching tour. People love to get out into nature, and they’re willing to pay for it.

5. Host a wellness retreat

If you’re passionate about wellness, why not host a retreat? You can offer yoga classes, meditation sessions, and healthy meals. This is a great way to help people relax and recharge, while earning some extra cash.

In conclusion, offering experiences on Airbnb is a great way to make some extra cash. With these five easy ideas, you can get started today.

For more ideas and tips on how to make money, check out this Airbnb guide inside our academy.

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10 Tips for Making More Money with Your Airbnb Listing



If you’re an Airbnb host looking to increase your revenue, there are several strategies you can implement to make your listing more appealing to potential guests.

Here are 10 tips for making more money with your Airbnb listing:

  1. Set competitive pricing: Research the prices of similar listings in your area to ensure you’re offering a competitive rate. Consider lowering your prices during slow seasons or offering discounts for longer stays.
  2. Offer extra amenities: Providing extra amenities, such as a pool, hot tub, or complimentary breakfast, can make your listing more attractive to guests and justify a higher price.
  3. Invest in high-quality photos: High-quality photos of your space can make a big difference in how many bookings you receive. Consider hiring a professional photographer to capture the best aspects of your listing.
  4. Keep your listing up to date: Make sure your listing accurately reflects the current state of your property. Update your photos, descriptions, and amenities regularly to keep your listing relevant and appealing.
  5. Respond promptly to inquiries: Quick responses to guest inquiries can lead to more bookings and positive reviews. Make sure to check your messages frequently and respond as soon as possible.
  6. Provide excellent customer service: Going above and beyond for your guests can lead to positive reviews and repeat bookings. Make sure to communicate clearly and address any issues promptly.
  7. Offer local recommendations: Providing guests with recommendations for local restaurants, attractions, and activities can enhance their experience and justify a higher price for your listing.
  8. Allow instant bookings: Allowing guests to book instantly can make your listing more appealing to those who need to book at the last minute. However, make sure to set clear guidelines for instant bookings to avoid any issues.
  9. Offer discounts for repeat guests: Offering discounts to guests who have stayed with you in the past can encourage repeat bookings and increase your revenue over time.
  10. Keep your space clean and well-maintained: A clean and well-maintained space can lead to positive reviews and repeat bookings. Make sure to keep your space clean and address any maintenance issues promptly.

Implementing these 10 tips can help you make more money with your Airbnb listing and improve your overall hosting experience. Happy hosting!

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How Big Real Estate Moguls Avoid Taxes (And How You Can, Too) 👀



I was looking around Google for an old article on tax strategies and this five-year old video of myself happened to pop up.

I’m interviewing a tax expert about how real estate investors avoid paying taxes in perpetuity—AND how everyday citizens can do the same thing.

(Real estate—our TEMPLE I and TEMPLE II projects included—has a number of tax benefits savvy investors have capitalized on for years, including Opportunity Zone breaks and 10-year tax abatements.)

There’s the 1031 exchange, of course, which I’ve shared with you guys before. 

Just to refresh your memory, the 1031 Exchange allows you to roll over gains from your last project into a new property TAX FREE—as long as said property is worth the same or more.

But there’s ANOTHER TAX LOOPHOLE that can take your portfolio to an entirely new level by splitting your capital gains into MULTIPLE properties.

So I thought I’d share it with you guys. 💎

You can check it out here.

Let me know what you think. 😎

PS: In our next update, I’m going to break down how real estate moguls get paid from their properties…tax free. 👀
PPS: If you want to learn how to implement generational wealth strategies like this one, you can join our NYCE wealth academy (TRIBE U) here.

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