Fall in Nykaa was expected due to fall in all internet stocks, but fall due to lock in period opening caught me off guard. The degree of fall is not certain, so I have decided to keep track of its price in relation to the 7 Months moving average and buy when it crosses above it. It closely relates to the 200 Day MA or 30 Week MA advocated by many in this forum.
To know why the PE investors are selling, we have to see it from their point of view. They must have invested in many startups at their initiation or early phase and many of them have failed leading to a loss. The success rate is low in all businesses and very low in startups. Exiting this stock with decent return will offset those losses and give them required capital to further invest in other startups or give back money to investors.
By December, all who have to exit will exit. Then growth and margin will determine where the consolidation happens. Allocation decisions can be taken then.
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