Beware of the IPO's

1) IPO's are expensive:-

IPO is an opportunity for previous investors – founders, venture capital firms, large individual investors – to sell out what they have invested.

That is why most IPOs are often expensively priced to provide an exit to existing investors.

 2) IPOs are over-hyped:-

Hype is created by using terms like “listing gains”, “bright future”, “long-term story”.

The whole IPO process is intentionally hyped up to get as much attention as possible so as the initial investors can cash out.

3) IPOs come in the bull market:-

Most of the IPOs come under “bull market conditions”—which means favorable for the seller and less favorable for the buyer.

During the entire stock market history, there have been few IPOs that have been launched keeping in mind the interest of investors.

4) Quote from the In Intelligent Investor, 

1) "Benjamin Graham" defined IPOs does not stand only for ‘initial public offering’. More accurately, it is a shorthand for…
It’s Probably Overpriced, or Imaginary Profits Only, or even Insiders’ Private Opportunity.

2) An IPO is like a negotiated transaction – the seller chooses when to come public – and it’s unlikely to be a time that’s favorable to you. "Warren Buffett"

3) An IPO is a product that is against investor interest, as it is mostly offered to investors when they are willing to pay a higher and outrageous valuation in boom times. "Parag Parikh"

"So don’t buy a stock only because it’s an IPO – do it because it’s a good ‘investment’".