We all know that 2011 IPOs were beaten up pretty badly last year, even though most of them came in the first half of the year, leaving them exposed to H2 market conditions later. According to a post on the NYSE Exchanges blog, there's a reason to look at first-day performance rather than focusing on what follows:
There is nothing wrong with looking at an IPO's performance and I can make arguments for many relevant periods. However, the media's desire to focus on performance after the first day's close based on an argument that this is when retail investors can buy has its own drawbacks. Pricing performance that first day is something we look at closely, not ignore. While institutional investors drive these pricings and receive the majority of shares allocated, many of the managers buying shares are doing so for institutions such as Fidelity, T Rowe, and Capital Research that are managing the same retail investors' retirement money. So, when prices go up on day 1, it isn't bad.
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Source: NYSE
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