There are 54 pages of risk factors, which, after reading many S-1 filings over the years, seems pretty long. One of the most notable is the sentence, “We have incurred substantial losses during our history and may never achieve profitability.”
My understanding is on these fillings you’re supposed to give a full accounting of all the risks so investors can’t sue you later. It’s like going for surgery where they say you could die - not saying it’s likely, but tries to get them off the hook.
This does not stop companies being successful in IPOs and giving share holders lucrative gains. Take Atlassian as an example of a company seen as successful but is not profitable.
I am not a CFO but I believe essentially by eating into cash reserves and accumulating debt. Also there is some wizardry when you work out operating profit / EBIT.
Well that doesn’t sound very promising for them.
I’m not an expert or anything, but that doesn’t sound like a very good investment.
You could short it…
My understanding is on these fillings you’re supposed to give a full accounting of all the risks so investors can’t sue you later. It’s like going for surgery where they say you could die - not saying it’s likely, but tries to get them off the hook.
This does not stop companies being successful in IPOs and giving share holders lucrative gains. Take Atlassian as an example of a company seen as successful but is not profitable.
Atlassian has not yet posted a full-year profit in its 20+ years
What does that mean? Who pays the shortfalls?
I am not a CFO but I believe essentially by eating into cash reserves and accumulating debt. Also there is some wizardry when you work out operating profit / EBIT.
Earnings vs Debt
Someone more financially competent may want to offer a more accurate answer.