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May 29, 2019 | An IPO Wet Blanket Shrouds Wall Street

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Although I usually let charts tell me where stocks are headed next, the current technical runes are a tad sunnier than I at the moment. This is notwithstanding recent weakness that has caused new record highs that were within spitting distance just a few weeks ago to recede. A 3095 target that lay just 4.5% from early May’s peak now sits 10.5% away. It’s certainly do-able, but I doubt buyers have the moxie to turn things around as sharply as they did in December.

The failure of much-ballyhooed IPOs in Uber and Lyft to get Wall Street’s speculative juices going is a wet blanket shrouding the Street right now, the wetter because the bloated airbag called WeWork seems likely to lay an egg when it goes public. If it bombs, that would complete a bearish hat-trick of IPOs. The office-rental firm sported a $47 billion valuation in January, and although that is now looking like pie-in-the-sky, there’s no telling how severely the stock will be marked down when it starts to trade.

Shady Numbers

However, because WeWork’s nifty accounting tricks are even shadier than Lyft’s or Uber’s, and because investors have been in such a surly mode lately, we should look for WeWork shares to get savaged in the early going. With such a drubbing in prospect, it’s hard to imagine investors summoning the bravado to push the shares of Apple, Facebook, Boeing et al. into the ether, especially since all of those companies have serious problems of their own that have been widely

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May 29th, 2019

Posted In: Rick's Picks

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