Stay away from this company set to go public next week, warns Jim Cramer
On Friday, CNBC’s Jim Cramer told investors to steer clear of Ivanhoe Electric, a mining technology company that is expected to sell its shares in an initial public offering next week.
“Even if…Ivanhoe Electric comes out next week, I think you should avoid it. Now is not the time to bet on extremely early-stage copper mining technology,” the host said. “Mad Money”.
The company, owned by mining billionaire Robert Friedland, plans to offer about 14 million shares at a price of between $11.75 and $12.50 each, according to a Securities Exchange Commission filing. The deal, which was originally expected to close this week, is now expected to close next week, IFR reports.
Cramer said the company’s choice to go public in a market that continues to be rocked by inflation, the war between Russia and Ukraine and Covid lockdowns in China should be a signal of alarm for investors.
“I can’t think of a good reason why any sane executive would want to take their company public right now, unless they really need the money…or expect their company to go public. business deteriorates significantly in the near future,” he said.
He added that Ivanhoe’s biggest red flag is a line in its prospectus, where the company said “there is material uncertainty that casts substantial doubt on our ability to continue as a going concern.”
“A year or two ago, investors were willing to take that kind of risk. But in this market, do you really want to take a chance on a company that might not even exist in a year or two? ” Cramer said.
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