So you say you want to invest in IPOs? Maybe make a fortune on the next Facebook? Well, good luck.
The fact is, most IPO stocks underperform the market for several years after going public. That's not surprising. After all, when a company sells stock to the public in an "initial public offering," its goal isn't to give you a quick profit. Its goals are more often to:
These are just a few reasons why Warren Buffett tells investors that they're better off staying away from IPOs than investing in them, calling IPOs in general "a stupid game." That being said, if you're determined to invest in IPOs, here's how to do it.
Source: Fool.com