My advice is that you should not buy IPOs at their initial offering price and that you should never buy an IPO just after it begins trading at prices that are generally higher than the IPO price. Historically, IPOs have been a bad deal. In measuring all IPOs five years after their initial issuance, researchers have found that IPOs underperform the total stock market by about four percentage points per year. The poor performance starts about six months after the issue is sold. Six months is generally set as the “lockup” period, where insiders are prohibited from selling stock to the public.
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Wonder what he thinks of the indian IPO scenario in 2020. Especially PSU stocks and the IPO mechanism.
