Should you leverage to buy into IPOs

Wed, Mar 16th 2011, 07:51 AM

With over $100 million in initial public offerings (IPOs) expected to come on stream this year, you may be wondering if it is worth borrowing money to get in on the ground floor.
Guardian Business asked some financial experts what prospective buyers thinking about using leverage to get in on the action should contemplate. The take-away message may be that while borrowing to buy into equities is not necessarily a bad idea, investors need to
do their homework and be confident about the security they will invest in.
“Leverage to make an investment or to buy shares is not a bad thing,” Ken Kerr, CEO of Providence Advisors said yesterday. “The critical point is the carrying ...

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