Ed Butowsky: Whats Happening To These IPOs?

As I have said before, you have to look under the hood of an IPO before investing. What is the motivation for any company to go public?
clipped from www.sfgate.com

Molycorp Plunges 14% on First Day After Chopping Rare-Earth IPO

July 29 (Bloomberg) — Molycorp Inc., owner of the world’s largest non-Chinese deposit of rare-earth metals, declined in its first day of trading after chopping the size of its initial public offering by 18 percent.

“You have an environment where a lot of companies are going public that shouldn’t be because they aren’t ripe yet,” said Ed Butowsky, managing director at Chapwood Capital Investment Management LLC in Addison, Texas. “It highlights how unstable some of these companies going public are.”

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