Hi there,
There is an inherent risk in investing in IPOs and there is no right answer here. The best retail investors can do is look for signs such as how the pricing has come in. Usually, when an IPO prices at the low end, it can be a sign that it will underperform upon listing. This is what happened with BBTV.
On the flip side, when there is strong demand for an IPO it usually opens higher. This happened with recent IPOs such as NVEI and DND. In Pivotree's case, it saw strong demand and it priced its IPO higher. Does this guarantee that it will open above IPO price? No - there are no guarantees. It does however, increase the likelihood.
Investing in these IPOs is even more risky when the markets are experiencing periods of considerable uncertainty - as is the case right now. In this environment, it really is guess work. We like to see a few quarters worth of earnings before we would outright say xxx is a good buy, or provides decent value. There have been a couple IPOs recently (like DND and NVEI) that were trading at big discounts to their peers upon listing.
Although both BBTV and PVT look interesting - and we are keeping an eye on them - at the time of listing, I'd say that PVT was the one trading at the biggest discount to peers. However, as discussed in our last post on the company, there is a big range in valuations in the industry. Where it settles will be interesting to see. Personally, I'd look at taking a position in PVT if it dipped upon open or somewhere under $11.00 - but I would not chase it and I would average into my position. BBTV - I'm watching, but at this point I'd like to see where it settles and it is difficult given the market volatility.
We do stress that investing in either of these comes with a high degree of risk and is likely not suitable for the defensive investor. It is thus, important to understand your risk profile before investing in IPOs.
Mat