Would you buy: Yes
Arnott said he’d buy at the IPO if he were a retail trader.
While he thinks the company’s valuation is outlandish, steady buying from index funds tracking the S&P 500 and Nasdaq 100 should propel the stock upward as it’s gradually folded into them, he said.
“I don’t buy stocks at 100-times sales,” Arnott said. “This would qualify as a non-fundamental purchase decision.”
He continued: “I would trim the position when it’s added to the index, but I wouldn’t necessarily get rid of the whole thing because no matter what the valuation, as the float increases as share lockups for those who own the stock start to lapse and they drop their stock onto the market, the index funds will have to be there to buy 25% of whatever new float is out there, and that’s wild.”
