Given how hot the IPO market is, I’m hearing some phenomenally stupid stories from the unlisted market. People are blindly punting on so-called “pre-IPO” companies hoping they’ll make bigger gains than during the actual IPO.

The greed is causing people to ignore some hard realities: these shares already come with 100–500% markups, ridiculous commissions, and terrible pricing. The biggest risk? There have been numerous cases where the IPO price ended up lower than the price at which people bought shares in the unlisted market. All those “gains” wiped out before you even start.

I honestly didn’t expect the unlisted share space to become this popular. Colleagues showed me a platform sending WhatsApp blasts pushing this stuff. It’s kind of crazy what’s happening out there.

Read more on risks of investing in unlisted shares here.

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