IPO Performance…Now?

Rosetta Stone (RST) just IPOed this Thursday. Is it attractive? Kindda. I’ve seen IPOs perform pretty well for the first week, so I’m tempted to make a quick scalp trade. On the other hand, I looked up how IPOs are really doing in the last 12 months. Think twice before you get into IPOs.

Top 10 Gainers and Losers – Last 12 months (From Yahoo.com)

(Click To Enlarge)

Tell me what’s wrong with this picture. It’s freaken ugly! Most of the “gainers” are IPOs that opened in the last few months, if not weeks. On the flip side, all of the ones that debuted in 2008 are on the losers list.

Comparing top 10 gainers to the top 10 losers makes you think twice before investing in IPOs. Sure, if you choose the right one you can still win big…that’s the attractiveness of IPOs. But man talking about bad odds. The only ones I would consider buying now is CYOU (Changyou.com) and RST (Rosetta Stone).

Bottom line in this big bear market, I would be cautious getting into an IPO so do your homework and buy because there’s value, not because the IPOs surging and you don’t want to miss out.