When I look at the IPO calendar ahead of us, it makes me sick. We've got six money-losing biotech companies on the deck to complement all the money-losing merchandise that's being pumped out that's meant to pull the money out of your wallet as surely as High Priest Mola Ram pulled the beating heart out of a sorry soul in Indiana Jones in the Temple of Doom.
The clothes rack that is Peloton (PTON) broke the back of the IPO camel last week. We all knew that the chute had effectively been closed for all the money losers but the companies and the issuers didn't mind even as those of us who follow these things sensed pending doom, a sense that turned out to be right. In fact the only encouraging sign of this whole hideous moment was when Endeavor, where my agent resides, pulled its IPO. How could it do that? Because it makes a lot of money, was hoping to use the stock as a currency to buy other companies, and said the hell with it. The company wasn't going to be lumped in with the Pelotons of the world that devour money. Endeavor had an adjusted EBITDA of more than $500 million last year and it could be up substantially more this year. I like that it chose not to swim in the IPO cesspool. It didn't need to be tarnished by it.
From this point on, beginning this week if you didn't listen to me last week, you can't be in the money-losers even if they have the potential for high growth. We are in the wrong stage of the market for such tomfoolery. In fact the only deals I want now are deals where the money is a secondary concern, which in most of the cases in the pipe, are few and far between.
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BlackRock's CEO will now make investment decisions based on a company's commitment to environmental sustainability. You can bet the financial world will never be the same again.
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