IPOs
A company's first public share sale — exciting, and statistically treacherous for buyers at the open.
Corporate EventsBeginner 4 min read· Lesson 9 of 11 in Stock Market Basics
Process
In an IPO, underwriters price a block of new shares sold to institutions; public trading starts afterward, often far from the offer price. Lock-up agreements bar insiders from selling for ~90–180 days — their expiry adds supply and frequently pressures price.
The evidence
First-day 'pops' go to allocated institutions, not open-market buyers; the average IPO bought at the opening print has historically UNDERPERFORMED the market over the following years. Letting a new issue season for a few quarters of public financials costs little and filters a lot.