mardi 26 mai 2015

David's Tea initial public abusive offering (IPAO)

The IPO of David's Tea sounded to me as great news.

Do you know the business? No? It's pretty simple. They sell a wide variety of tea and many people are crazy about this business because they feel so healthy, drinking tea. If you ask me, I'd tell you that they are just poor mofos trying to elevate themselves above the masses with their drinking habits. Fuck off. If I want flavour in my glass of hot water, i'll pour a few drops of lemon and that'll taste the same fucking shit, and that'll cost NOTHING.

The business has a very high CAGR (compound annual growth rate) of it's earnings (69% per year since 2009!). The product is bought at high frequency, it's a synonym of health, the business could be exported in many places and the margins seem high. All the qualities of a great investment (even if I don't drink tea except when I don't have the choice).

But fuck, they want to sell their shares at 50 times earnings. I know it's always like that with initial public offerings, but come on, I won't fucking pay that much, even for a business which seems great.

You know, there's three interesting IPO in Quebec for now:

1- David's tea (very soon);
2- GDI cleaning services (a very recent IPO);
3- Chocolats favoris (everybody in the area of Quebec City knows this, and more and more people know this in the Montreal area: they sell chocolate and, mostly, chocolate dipped ice cream). The valuation of the IPO should be high as fuck...

You should closely follow these three companies. I'm pretty sure that at least one of them is gonna be a multiple bagger in the next few years. Even if the price of the IPO is fucking abusive.

All in all, follow them, but don't buy them in the short term.

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