IPO stands for Initial Public Offering. The definition of an IPO is simply a time when a private company comes public by issuing shares of common stock that will begin trading on listed stock exchanges.
The common stock is issued to both individual and institutional investors. Institutional investors include mutual funds, pension funds, endowments, and retirement systems. Individual investors may get new issue stock through their broker-dealers or brokerage firms where their investment accounts are held.
When I started in the financial planning business over 30 years ago, IPO stock was allocated about 50% to institutions with about 50% going to individual investors. Today typically about 80% is allocated to institutions with only about 20% being allocated to individuals. Buying IPO stock can be rewarding, but is risky and is considered by regulators to be a speculative investment. If you are going to participate in buying recently issued IPO stock that has begun trading on the secondary market, you need to do a lot of homework, just as buying common stocks that have been public for years requires homework also.
I do the homework. And as a result, I have elected to incorporate newly issued IPO stocks that trade on the secondary market into my "The New Galaxy" growth equity managed account. (See "The New Galaxy" page of this website for further information.)
Each year there are typically 50-500 IPO stocks issued from around the world here in the United States and listed on U.S. stock exchanges for daily purchase or sale.
I have listed below IPOs from the past 4 calendar years:
I have further quantified their actual returns the calendar year they became public.This listing is not a recommendation to buy list, but for informational purposes only.
*CorpHousing Group 11/2/22 changed name to LuxUrban Hotels(LUXH)