How often on I p o launch does the stock price rise

1. Historical Trends: On the first day of trading, stock prices for newly listed companies, or IPOs, often experience a significant increase, known as an "IPO pop." This trend is supported by historical data showing that in 2020, the average first-day IPO gain was 36%, which is quite robust.
2. Volatility and Subsequent Performance: While the average gains on the first day are impressive, it's crucial to note that about a third of IPOs actually see their stock price decrease on the first day of trading. This volatility can lead to a "whipsaw," where the stock price experiences extreme fluctuations.
3. Market Factors Influencing IPO Performance: The magnitude of the IPO pop can vary significantly based on economic factors. For instance, during the Dot-Com bubble in 2000, IPOs saw an average increase of 60% on their first day. However, this was followed by a market crash that affected many companies.
4. Long-Term Performance Concerns: When examining the long-term performance of IPOs, it's important to note that these stocks often underperform the market if held for three years. This suggests that the initial excitement and price increase on the first day may not be indicative of future returns.
5. Strategic Considerations for Investors: Given the volatility and potential for underperformance, investors might consider waiting for the price to settle after the initial public offering. This approach can be beneficial as it avoids the potential for buying in at inflated prices.

In conclusion, while it is common for stock prices to rise on the first day of an IPO, this does not guarantee long-term profitability. The decision to buy an IPO on the first day should be based on a comprehensive analysis of the company's fundamentals, market conditions, and long-term growth potential.