Is buying at an IPO a good idea?

On average, no: IPOs tend to lag the market in their first years. If you genuinely like the company, better prices usually appear months later — for instance after the lock-up expires.

Do newly listed companies pay dividends?

Rarely: they are usually expanding businesses that reinvest all profits. The ones that become good payers do so years after maturing on the market.

What is an IPO lock-up?

The period (typically 90–180 days) during which founders and early investors cannot sell their shares. Its expiry increases the supply of stock and tends to pressure the price down.

IPO | Wiki Por Dividendos - Por Dividendos

An IPO (Initial Public Offering) is the process by which a private company starts trading on the stock market, selling shares to the public for the first time. It is the moment of maximum media attention for a company — and, statistically, one of the worst times to buy it.

How it works

The company hires investment banks that value the business, prepare the prospectus and "place" the shares with institutional investors. The offer price balances two opposing interests: the company wants to raise as much as possible; the banks want the first day to pop. Retail investors usually arrive afterwards, buying on the open market from whoever got in earlier and cheaper.

Two details of the process matter especially:

Lock-up: founders and early investors are barred from selling for a period (90–180 days). When it expires, the supply of shares can flood the market — a date worth having on the calendar.
Asymmetric information: the seller (the company, the venture funds) chooses the timing. Nobody takes their company public when it is cheap.

IPO

How it works

What the statistics say

IPOs and dividends

Frequently asked questions