IPOs offer investors the chance to invest early in promising companies with the potential for significant gains, as exemplified by Apple and Amazon. However, they also come with considerable risks including high volatility and potential underperformance against market benchmarks, particularly in the first year. Research indicates that while some IPOs can be successful, many fail to deliver on investor expectations, particularly smaller, unprofitable companies. Despite these challenges, certain IPOs debuting in 2025 have shown promise, suggesting that discerning investors can achieve notable returns.
Initial public offerings (IPOs) captivate investors with the chance to get in on the ground floor of promising companies, potentially reaping substantial long-term returns.
However, IPOs carry significant risks, often amplified by market hype and limited historical data, leading to frequent underperformance compared to broader market benchmarks.
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