Does Investing in IPOs Make Money?

There have been 1,782 IPOs since 1998 through to now.  Here’s what we found in respect to performance:

Average first day premium (from the issue price) of 18.79%
Average premium from listing price after three months of 25.48%
The scorecard for 2016 shows an average first day premium of 19.75%
25.71% is the average day one premium for ‘metals and mining’ companies in 2016

Past Performance

Of course there are a few practical issues with replicating this result in practice, the most significant being the difficulty in getting access to each IPO.

Some IPOs are only offered to a small segment of the market.  Others are fully subscribed shortly after they open for applications.

Past performance is not a reliable indication of future performance.

You can improve your chances of getting subscriptions in IPOs by getting your application in early.

Upcoming Floats offers an entirely free service to alert investors every time a new IPO opens for applications.

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