The Fool FAQ

Initial Public Offerings (IPO)

The Fool FAQ

Initial Public Offerings have piqued my curiosity. Can someone tell me how to find out about these issues before they storm into the public eye?

We're generally against leaping into IPO's. If you're inclined to make that leap, though, the sources are:

  1. Reuters, for those on AOL. They have an IPO diary which lists all the IPOs coming out in the next few months, with the names of the underwriters; and
  2. Barron's

Both Reuters and Barron's, in addition to the list of all upcoming IPOs, have a weekly feature on the "top" IPOs; however, these lists are only of use to institutional investors: investors without huge annual commissions (Barron's says roughly $50,000 in commissions each year) will not get a chance at the IPOs on these lists.

On the Internet, there is

I'm mightily tempted to buy into Hype, Inc. (GOGO), a newly minted IPO. What would the Fools advise me to do? Yea or nay?

Well, of course, it's impossible to comment on GOGO in particular without more information. However, you may want to consider that very many IPO's fail to hold their opening gains. In fact, many of them end up selling for far less than their offering prices within a year.

Of course, some IPO's simply soar and keep soaring. Be careful, though. Before you invest in an IPO, be sure to dig into the fate of some of the less successful newcomers. Don't get caught up in the hysteria of IPO's and come to think all of them will be the path to riches. They won't be.