My Top Tech IPO to Buy in June
Initial public offerings (IPOs) attract a lot of attention on Wall Street and among retail investors. But generally, they're best avoided.
While IPO stocks often pop on their opening days, especially high-profile ones, over the long term most IPOs don't do as well. According to one study, three years after they've gone public, nearly two-thirds of IPOs are underperforming the market (based on the S&P 500 for large companies and the Russell 2000 for small ones), and most are more than 10% behind the market's returns.
That makes sense: Newly public companies are competing with established ones, and many of them are unprofitable and have yet to prove themselves.
Source Fool.com
