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Contributors (Investment Firms (Proofs (http://uk.businessinsider…
Contributors
Investment Firms
How?
Wrong valuation > overprice shares > lost for investors
When?
2017
eg. Snap Inc. $28 billion
No profit 2 years before IPO
Why?
Negligence or could be bribery behind close doors
Proofs
http://uk.businessinsider.com/analyst-snapchats-valuation-numbers-dont-add-up-2017-3
http://fortune.com/2017/02/02/snapchat-ipo-snap-stock/
https://seekingalpha.com/article/4078179-twitters-perspective-snaps-valuation
http://www.telegraph.co.uk/technology/2017/06/22/tech-bubble-close-bursting/
https://www.cnbc.com/2017/04/12/snap-lawsuit-ceo-evan-spiegel-said-misreported-metrics-no-big-deal.html
https://www.theguardian.com/technology/2017/mar/02/snapchat-ipo-valuation-evan-spiegel-bobby-murphy-snap-inc
Government
When?
2016 US Presidential Election
Why?
boost corporate bottom lines
How?
Trump's tax reform > tax cut > better bottom lines for corp > boost investors' confidence
Ref: Vox
Proofs
Investors
How?
Venture Capital increased $37.76 billion in 3876 ventures backed companies in the first half of 2017 but the problem is the IPO is doldrums > those companies are unprofitable
When?
2017
Why
opportunity to invest in emerging companies > large return
Proofs
Companies
How?
Technique such as repurchase stocks or dividends > Buyback shares > less shares in the market > share price increase > attractive to investors
False valuation > shares overprice > lost in financial markets for investors both institutional and retail
eg. Snap Inc. > invalid report of KPIs (DAU) > internal employee sues
When?
2012 for both repurchase stocks and dividends
2017 for Snap Inc
Why?
the company could be in a bad financial position
eg. Lehman Brothers 2008
same strats > hiding company financial disaster > recovery in financial position