![]() Which, as I’ve been saying, bodes well for more gains. A strong opening suggests that investors have been itching to buy the stock. On IPO day, it becomes fair game for everyone to buy. Only founders, early investors, and venture capitalists typically own it. Remember, before IPO day, a company is private. A Strong IPO Day Shows Pent Up Demand for a Stock Instead, Beyond Meat’s story was beamed into Americans’ living rooms for free, all thanks to its successful IPO. The company would’ve had to spend tens if not hundreds of millions of dollars to buy that kind of exposure. It was like pouring jet fuel on a bonfire. The already red-hot stock got even hotter. Naturally, Beyond Meat became the talk of the investing world.įor months, CNBC talked about it every day. Beyond Meat went on to gain 859% in under three months, ranking it among the greatest IPOs of all time. Like Shake Shack, Beyond Meat didn’t have much of a following before it went public.īeyond Meat spiked 170% on its first day of trading.Īnd that was only the beginning. Beyond Meat (BYND) Played Out the Same Way It was like a free, multi-week TV commercial. They were showing footage of its juicy burgers, with folks lined up outside the restaurant to buy them. It got a ton of airtime.Īnd CNBC wasn’t just showing charts of the company’s stock price. For weeks, it was one of the biggest stories on CNBC. Unless you lived near a big city, chances are you never tasted a Shack Burger.īut after its stunningly successful IPO, Shake Shack became the talk of the town. The company wasn’t well-known before it went public. They’ll say Shake Shack’s advisors underpriced its IPO and left a lot of money on the table.īut this “underpricing” was the best thing ever to happen to Shake Shack. Now, some analysts will say this is a bad thing. Its shares exploded 135% on the first day of trading. Shake Shack went public back in January 2015. Successful IPOs often get millions of dollars’ worth of free advertising! Here’s Why IPOs That “Storm Out of the Gate” Often March Higher On the other hand, you could have tripled your money on Inspire Medical by simply buying its stock the day of its strong IPO showing. Investors who follow the “don’t chase stocks” rule missed out on all these big profits. And all you had to do was buy PLAN on the day of its IPO. You could have pocketed 181% in just nine months. It surged 87% on its first day of trading. INSP tripled in value over the next 15 months.Īnaplan (PLAN)-an enterprise software company-followed a similar pattern and got off to a hot start. Investors who acted on this “buy signal” made out like bandits. It jumped 53% on its first day of trading! ![]() You could have made a fortune “chasing” Inspire Medical Systems (INSP)-a medical devices company. It nearly doubled in value over the next 14 months.įive years later, it traded 731% above its IPO price. It spiked 32% on its first day of trading.įrom there, it took on a life of its own. In short, IPOs that explode out of the gate are far more likely to continue marching higher for months, and sometimes years.Ĭonsider software company HubSpot (HUBS)-a software company that went public in October 2014. ![]() For example, the best performing IPOs tend to be for small, fast-growing, under-the-radar companies.īut one of the most important factors is first-day performance. I’ve examined the returns of more than 8,000 IPOs to figure out why some soar a lot more than others. I’ve Analyzed Nearly Four Decades Worth of IPO Data ![]()
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