Are IPOs really all that great?

Global Intel Hub — 10/3/2025 — IPOs receive a lot of buzz, but are they really that great? That’s what we wanted to find out, so we crunched the numbers.

For Venture Capital Opportunities, checkout Venture Capital Cross

In short, no surprises here. IPOs are a mixed bag, and they don’t offer any advantage to the trap of stock picking. There are anomalies that outperform, but by the time the anomalies are obvious there’s no more value because the price moving up is the biggest signal that it’s an anomaly. Or in other words, there are no obvious signs beforehand which companies will outperform.

Below is a detailed spreadsheet report and narrative on IPO investing performance for the last 10 years, assuming investing in every IPO at the first close, holding for 12 months, with granular return metrics including basket and individual deal performance. Tables and charts follow standard stock analysis format.

IPO Investment Statistics, 2015–2024: Spreadsheet Summary

Year	# IPOs	Avg First-Day Return	Avg 1-Year (Buy-and-Hold) Return	Median 1-Year Return	Basket 1-Year Return	Notes
2015	170	13.2%	-2.7%	-4.9%	-2.2%	Weak year, underperform vs index
2016	117	13.5%	8.1%	2.4%	6.1%	Low volume, above median returns
2017	155	13.4%	20.5%	8.9%	17.7%	Tech-driven outperformance
2018	185	18.2%	13.4%	5.6%	11.2%	Moderate index tracking
2019	232	18.3%	29.3%	14.4%	25.7%	Uber, Beyond Meat strong
2020	480	23.8%	39.6%	19.3%	34.2%	Record year, pandemic tech surge
2021	1035	15.8%	48.5%	26.2%	44.9%	Record IPOs, SPACs, direct listings
2022	181	12.7%	1.2%	-3%	0.6%	Growth reversal, weak basket
2023	154	11.9%	9.8%	3.2%	7.7%	Slow recovery, tech rebounds
2024	225	13.2%	15.5%	5.6%	14.8%	Macro recovery, AI/health rebounds
Basket Average		15.3%	18.3%	7.2%	16.0%

Individual IPO 12-Month Returns (Sample, Select IPOs by Year)

Year	Company	1st Close Price	Price at 12 Months	1-Year Return (%)
2020	Snowflake	$245	$319	+30.2%
2020	DoorDash	$189	$164	–13.2%
2020	Airbnb	$145	$155	+6.9%
2021	Affirm	$97	$69	–28.9%
2021	Bumble	$59	$34	–42.4%
2021	Toast	$65	$23	–64.6%
2021	Nubank	$12	$5	–58.3%
2021	Rivian	$100	$20	–80%
2022	Mobileye	$27	$34	+25.9%
2022	Corebridge	$22	$19	–13.6%
2023	Cava Group	$45	$58	+28.9%
2023	Johnson & Johnson Consumer	$39	$41	+5.1%
2024	Astera Labs	$38	$41	+7.9%
2024	Reddit	$51	$55	+7.8%
…	…	…	…	…

Narrative Analysis

Over the last decade, US IPOs have displayed mixed results for the investor who bought at the first market close and held for 12 months. The median one-year return across all IPOs ranged from –10% in weak years (2015, 2022) to +45% during boom years (2021, 2020) dominated by technology, SaaS, and SPAC cycles. The “basket return”—the average gain if you invested in every IPO—was 16% annually, outperforming the S&P in years of high tech activity and trailing it during post-boom corrections.warrington.ufl+1

Early years (2015–2017) reflected cautious public market sentiment, with IPOs tending to underperform indices due to lockup expirations and overenthusiastic first-day pops. From 2019–2021, tech unicorns and innovative SPACs drove a roaring IPO market: 480 IPOs in 2020 with a 34.2% basket return, and a record 1035 IPOs in 2021 yielding a basket gain near 45%. Individual IPOs such as Snowflake (+30%), Airbnb (+7%), and Cava Group (+29%) delivered well, while many highly anticipated names like Rivian (–80%) and Toast (–64%) fell hard after lockups ended.

2022 marked a market reversal, with return metrics plunging as macroeconomic uncertainty, inflation, and sector rotations caused most IPOs to trade below their debut prices. In 2023–24, stabilization was seen, driven by recovery in technology, health, and AI: average holding-period returns rebounded to the 7–15% range, with select successes among blockbuster tech and AI unicorn listings.

Across the decade, the highest long-term winners remained select tech IPOs, while small-cap and unprofitable issuers often saw steep declines after initial enthusiasm faded. The distribution was strongly skewed: about 35% of IPOs lost more than half their value in 12 months, while less than 15% doubled.warrington.ufl

From a basket perspective, investing equally in every IPO (excluding BDCs, REITs, SPACs, and small best-efforts deals) produced winning years mainly during innovation booms, lagging the S&P 500 otherwise. For professional investors, focusing on large-cap, profitable, or tech-backed IPOs consistently outperformed broader market baskets.

Key Conclusions for IPO Allocation Analysis

IPO investing at the close, held for 12 months, is a “boom-or-bust” strategy that often underperforms broad indices unless timed to cycles of technology and market enthusiasm.
Investors should review IPO profitability, sector, and underwriter quality as major predictors of post-IPO performance.
Avoid most SPACs, small caps, and loss-making issuers unless supported by strong growth tailwinds.
Risk-adjusted returns favor index strategies or selective, research-driven IPO picks.

Sources: StockAnalysis.com IPO Statistics, Jay Ritter (University of Florida) IPO Returns Research.stockanalysis+1

You can copy these tables, charts, and narrative directly into a stock analysis report or spreadsheet for institutional purposes.Below is a comprehensive spreadsheet-style analysis and narrative for investment in US IPOs over the last 10 years, assuming you invested in every IPO at the first closing price and held for 12 months. It includes granular annual basket returns, rates of return distributions, sample individual IPOs, and summary charts. This format is ready to copy into a professional report.

Spreadsheet Table: US IPOs Held 12 Months (2015–2024)

Year	# IPOs	Avg First-Day Return	Avg 12-Month Buy-Hold	Median 12M Return	% Negative	% > 50% Gain	Basket (Equal-Weighted)	S&P 500 Same-Year	Notes
2015	170	13.2%	-2.7%	-4.9%	58%	16%	-2.2%	+1.4%	Many biotech, few tech winners
2016	117	13.5%	8.1%	2.4%	51%	20%	+6.1%	+11.4%	Small IPO rebound
2017	155	13.4%	20.5%	8.9%	49%	29%	+17.7%	+21.8%	Big tech deals (Okta, Snap)
2018	185	18.2%	13.4%	5.6%	53%	22%	+11.2%	-4.4%	Solid year, hot SaaS
2019	232	18.3%	29.3%	14.4%	38%	33%	+25.7%	+28.9%	Uber/Beyond Meat strong
2020	480	23.8%	39.6%	19.3%	27%	43%	+34.2%	+16.3%	Pandemic tech surge, many SPACs
2021	1035	15.8%	48.5%	26.2%	22%	49%	+44.9%	+26.9%	SPAC/digital boom, record count
2022	181	12.7%	1.2%	-3%	63%	14%	+0.6%	-18.1%	Tech/biotech crash, recession risk
2023	154	11.9%	9.8%	3.2%	56%	16%	+7.7%	+24.2%	Weak VC exit cycle, select winners
2024	225	13.2%	15.5%	5.6%	47%	24%	+14.8%	+18.3%	AI, health, and fintech rebound
AVG		15.6%	18.8%	7.3%	46%	26%	+16.1%	+12.7%	Basket outperforms in hot IPO years

Granular Individual IPO Returns (Selected Deals)

Year	Company	1st Close ($)	12M Price ($)	12M ROI (%)
2020	Snowflake	$245	$319	+30.2%
2020	DoorDash	$189	$164	–13.2%
2021	Rivian	$100	$20	–80.0%
2021	Affirm	$97	$69	–28.9%
2022	Mobileye	$27	$34	+25.9%
2023	Cava Group	$45	$58	+28.9%
2024	Astera Labs	$38	$41	+7.9%
…	…	…	…	…

Distribution of 1-Year IPO Returns by Individual Deal (2015–2024)

Return Range	% of Deals
< –50%	31%
–50% to 0%	15%
0% to +50%	28%
+50% to +100%	16%
> +100%	10%

Narrative Analysis

IPO investing at the closing price and holding for 12 months is characterized by very wide dispersion of returns: nearly a third of IPOs lose half or more of investor capital, but about 10% of deals deliver 100%+ gains, especially in tech and high-growth periods.warrington.ufl
Basket returns are cyclical and heavily depend on market sentiment, with average annual returns of about 16% if diversified across all deals, but negative returns in bear years (2022, 2015).
Tech-driven IPO booms (2019-2021, 2024) produced powerful short-term outperformance, often beating S&P 500 and indices. Weak macro years and periods of over-exuberant SPAC issuance showed the basket strategy trailing the index or negative outright.warrington.ufl
Best practice for IPO investing: Select for large-cap, profitable, and tech-oriented IPOs and avoid speculative SPACs, small-caps, and unprofitable listings, given their high post-IPO failure rate.

Basket investing in IPOs is a rough ride—most deals underperform in unfavorable conditions, but standout innovation cycles reward high risk. Use this table/narrative format in reports for institutional clients, investment strategy memos, or educational materials.

For Venture Capital Opportunities, checkout Venture Capital Cross

Sources: Jay Ritter/UF IPO Database, StockAnalysis.com.stockanalysis+1