CNBC’s Jim Kramer on Friday lashed out at how investment bankers handled recent early public offerings by two tech companies, such as Durdash and RBNB, which saw big pops in their stocks after starting trading this week.
“I don’t want to say that the market is broken, but the process of how we’re doing this deal is definitely broken,” Kramer said on “Squawk Bonx.”
Food delivery app Durdash closed its market higher by more than 85% in the first quarter on Wednesday, while home rental company RBNB rose more than 112% in the first day of business on Thursday.
That big first-day move, which left a lot of money on the table, is not the fault of the companies, Kramer said. Instead, he said the work being done by financial companies working on IPOs is shameful. “They should start focusing on how to do it better.”
While a big market debut is great for shareholders, it’s not so great for companies. In the case, Airbnb, which can raise twice as much money on its IPO, is valued at priced 5 billion each. For Dordesh, its IPO price also raised $ 102 to શેર 3.37 billion per share. If the company had closed share prices on its first day, it could have raised more than 6 6 billion.
Kramer said the latest pricing action is reminiscent of the dot-com boom in 1999, when interest from retail investors in public companies was similar.
“This is where the syndicate desk in 1999 called people completely wrong, and the public came back and the public didn’t come back as if they were bidding on a deal and they were just buying the same old, old funds stock. Is, “said the” Mad Money “host.
“This new set – and it’s not just Robinhood, but it’s public – so everyone keeps hitting it,” Kramer added, referring to the stock-trading app chosen by small investors.
On Wednesday, before Dordesh started trading, Kramer said he believes “rabid money” chases technology companies, especially young investors who frequently use their services.
“I think there’s money that basically says, ‘We don’t really care what the opening price will be,'” Kramer said. “This is not going to be a lot of discipline for many market buyers. They won’t put a price limit on it.”
TD Ameritrade’s chief strategist J.J. According to Kinahan, in fact, there were significant thousands of interest in Dordesh and RBNB on their first trading days. In a “squawk” xx interview on Friday, Kinhan said about 41% of Dordash’s trades on its broker’s platform belonged to millennial customers while for RBNB it was about 45%.
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