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What does an IPO's first day of trading tell investors? |
October 06, 2011
Q: How important is an IPO's first day of trading for longer-term investors? A: The first day of an initial public offering gets lots of attention. The splash from the debut of a brand-new stock on the market is hard to resist. Investors, who have been longing to buy a stock when it was private for years, might pile into shares when they first start trading. Similarly, investors who might get shares of a lagging IPO can't wait to dump them. First-day changes in IPOs get lots of attention, too, since they can be pretty large. This year, some of the biggest gainers on their first days include LinkedIn lnkd, Vera Bradley vra, The Fresh Market tfm , Endocyte ecyt and SodaStream soda, which gained 109%, 55%, 46%, 29% and 21% respectively on their first days, says Renaissance Capital. But do these first day pops, or losses, really tell investors about the IPOs going forward? The answer this year has been yes, according to an ...
http://feeds.abcnews.com/click.phdo?i=9004741c8ea65fa6661f0d84aabf1c98
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