Is Snowflake's IPO Surge Fair to Average Investors?
Shares of Snowflake (NYSE: SNOW) recently debuted with a bang, closing its first day of trading 111% higher than its initial public offering price of $120 per share, and raising about $3.4 billion in the largest software IPO ever. For many institutional investors, such as hedge funds, pensions, and mutual funds, Snowflake's IPO is not one they will soon forget, as shares on the first day of trading hit $319 at one point. But for the average retail investor, it wasn't as much fun. The first trade on the public market opened at $245 per share and closed about 4% higher.
I myself ventured away from my traditional area of expertise to get in on the action, and ended up buying shares of Snowflake higher than I would have liked (so much for that huge POP). The experience begs the question of whether it's fair for institutional investors to enjoy a 111% bump, while the average investor only saw a mediocre 4% return after the first day of trading.
Image source: Getty Images.
Source Fool.com
