Marshall,
The conclusions of the study are very misleading because they are being done without any relative comparison. Let me explain. The study concludes that you should hold IPOs and not flip them, especially if they underwritten by CSFB, GS, MSDW, Robbie Stephens, etc. However, what you really need to compare is the performance of an index, such as the Nasdaq, over the same periods.
For example, if you held all the MSDW IPOs through June 16th, your total gain was 211.5% instead of 120.3% which would've been if you'd sold at the end of the first day. Which means that holding the IPOs beyond the first day gave you an additional 41.5% gain. But what would the gain have been if you sold at the end of the first day and then put it in the NASDAQ COMP?
Recognize that the period of the IPOs studied in this report, has seen the greatest bull-run in the NASDAQ COMP (despite the last three months) and is up over 150%. Because we don't have the dates of the IPOs, we can't easily figure out which strategy would have been better.
- Marq. |
