It should be noted that most IPOs are not a good investment (unless you can get in pre-debut and sell on the first day). For some background on the topic, this

It should be noted that most IPOs are not a good investment (unless you can get in pre-debut and sell on the first day). For some background on the topic, this is a good episode to watch/hear: > We’ve previously compared IPOs to lotteries that are prone to inflated valuations and low returns. Today we welcome “Mr. IPO,” Professor Jay Ritter onto the show for a deeper dive into IPO performance, for his insights into SPACs, and to hear his research into why economic growth doesn’t correlate with stock returns. Early in the episode, Jay unpacks how long-term IPO returns perform against first-day trading. While exploring the role that venture capital plays in tech IPOs, Jay talks about why negative earnings don’t affect tech IPOs in the short-term before sharing how skewness factors tend to impact young companies. Reflecting on how IPOs are usually underpriced, Jay discusses how the interests of companies are not aligned with the interests of IPO underwriters. After looking into IPO allocation, Jay compares the 2020 ‘hot IPO market’ with the internet bubble of the late 90s. Later, we ask Jay about what special-purpose acquisition companies (SPACs) are and why they’ve exploded in recent years. His answers highlight their investing benefits, risks, and why SPACs might be a better option for companies than IPOs. We examine how SPACs have historically performed and then jump into our next topic; why economic growth isn’t a good indicator that a country is worth investing in. He touches on why returns don’t correlate with economic growth, the place of capital gains and dividend yields when investing abroad, and how innovations in an industry can lead to higher stock returns. We wrap up our conversation by asking Jay for his take on whether the stock market is efficient before hearing how he defines success in his life. Tune in to hear our incredible and informative talk with Jay Ritter. > Since 1996, Jay R. Ritter has served as the Joseph B. Cordell Eminent Scholar in the Department of Finance at the University of Florida's Warrington College of Business. Prof Ritter is known as “Mr. IPO” for his work on initial public offerings. During 2014-15, he served as president of the Financial Management Association. Prof. Ritter has been a trustee of a mutual fund, and a consultant for companies on valuation and financing decisions. He has also worked as an expert witness for government agencies and law firms, and is frequently quoted in the financial press. * https://rationalreminder.ca/podcast/139 https://rationalreminder.ca/podcast/139