ATFXAnalysis: Is a New Stock Burst a Good or Bad Thing, Investing Away from Black Platforms

View All · Published on 2022-11-18 16:59:25

Register now, make more friends, enjoy more functions, and let you play in the community easily.

You need Sign in Can be downloaded or viewed without an account?Register Now

x

New stock breakout refers to the situation where a stock falls below its issue price on the day it is issued and listed. In general, new stock breakdowns are relatively rare in bull markets and are more common during market hovering periods. Do you know if a new stock crash is a good thing or a bad thing?Why would you break your hair?Let's take a look together.

Is the bursting of new stocks a good thing or a bad thing?

The breakdown of new stocks cannot be generalized, and there is no absolute distinction between good and bad. As investors, we should approach the breakdown of new stocks rationally. With the marketization of new stock issuances, the phenomenon of new stock breakdowns is inevitable. Unless new stock issuances bid farewell to market-oriented issuances and return to the previous era of non market-oriented issuances, the phenomenon of new stock breakdowns will be greatly reduced, and even become an isolated phenomenon.

In the context of market-oriented issuance of new shares, the restrictions on the price to earnings ratio have been lifted, and the issuance price of new shares is dominated by the market. Therefore, all parties in the market, especially the sponsoring institutions, will actively raise the issuance price of new shares for the sake of their interests, especially in order to obtain excess sponsorship fees. This leads to the issuance of new shares exhibiting the "three highs" of high P/E ratio, high issuance price, and high oversubscription. It is also a very normal phenomenon for new shares to break through after going public.

In addition, for the market, the normalization of new stock issuances is also a good thing. It is not only beneficial for investors to rationally "launch new stocks", but also for new stock issuances to return to the track of healthy issuance. Afterwards, when investors invest in new products, they should not develop the habit of blindly investing in new products, but choose to invest selectively.