Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Charts & Analysis

IPOs – 91% traded below their issue price at some point

Data-Monster.jpg

Data Monster

IPOs – 91% traded below their issue price at some point

Feeling left out in the oversubscribed IPOs? Well, you may not be missing too much. Our Data Monster analysed all IPOs since 2009 and found there’s a high probability you can buy the stock later, cheaper than its issue price.
 
[level-capmind-pro]
 
Here’s what we found: Out of 162 IPOs since 2009, 147 (91%) stocks traded below their issue price at some point. Only 15 (9%) never went below their issue price.

IPO AnalysisHere’s a list of the winners: 

ALKEM, ENGINERSIN, EQUITAS, INFIBEAM, JUBLFOOD, LALPATHLAB, LOVABLE, NH, SHARDACROP, SHK, SYNGENE, THYROCARE, UJJIVAN, VRLLOG, WONDERLA

Wait, there’s more. Here’s what happened to the 147 at some point since listing:
  • 1/3 lost over 90% from their issue price
  • 2/3 lost over 50% from their issue price
The lure of the quick buck on listing can make you want to bid for most IPOs. But remember, you need to get lucky twice – first, to get some allotment of shares; and second, to get a listing pop.
 
[/level-capmind-pro]
But if this data makes sense to you, and you’re not in for a quick buck, consider a more patient strategy when it comes to investing in new listings. As Guy Kawasaki says, “patience is the art of concealing your impatience.” If you’re an impatient one, perhaps the Data Monster has given you an excuse to conceal it.
 
Till next time.
 
Adios.

Capital Mind divider

Disclaimer

Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion. 

Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.