The SpaceX (NASDAQ: SPCX) IPO reignited widespread investor enthusiasm for initial public offerings, a phenomenon that veteran market watchers have seen play out many times before.
An IPO, or initial public offering, is simply the process by which a privately held company issues shares to the public for the first time through a stock exchange.
In most cases, companies use IPOs to raise capital through an underwriter or investment bank, though in some instances they facilitate the sale of an insider’s or founder’s existing stake.
Despite the excitement that typically surrounds high-profile listings, the historical performance of newly public stocks is far less impressive than the buzz surrounding them tends to suggest.
An analysis by Edward Jones found that between 2011 and 2020, the typical technology company’s newly issued shares were priced down an average of 14% just six months after their IPO was completed.
Research by Burney Wealth Management Managing Partner Adam Newman found that shares of the 10 biggest public offerings every year since 2000 were down one year later, with an average loss of 27%.
That track record is worth keeping in mind as investor speculation builds around potential IPOs from artificial intelligence companies like OpenAI and Anthropic, both of which have generated considerable market attention.
SpaceX’s own share price weakness since hitting its post-IPO peak in June serves as a timely reminder that even the most anticipated listings are not immune to post-debut selling pressure.
Still, history also shows that some newly listed companies do go on to deliver exceptional long-term returns, with Meta Platforms (NASDAQ: META) being a notable example despite its difficult start as a public company.
Visa (NYSE: V), which has operated in a recognisable form since 1958, only went public in 2008, yet has been a particularly solid performer since then, illustrating the value of established business history at the time of listing.
Companies like Blue Apron, Stitch Fix, and Groupon demonstrate what can go wrong when investors rush to back businesses that have not yet proven their models can sustain growth over time.
By contrast, lesser-known companies including Legence, Park Dental Partners, and Pattern Group all went public in 2025 and have performed well since, despite attracting little mainstream attention at the time of their listings.
Greater hype at the time of an IPO tends to inflate perceived value, creating an unsustainable starting price that often corrects once broader investors have time to dig into the fundamentals.
GoPro (NASDAQ: GPRO) is a cautionary example, raising more than $400 million in its 2014 IPO partly for “general corporate purposes, including working capital, and to repay our term loan [$111 million at the time] under our credit facility,” even as sales and marketing remained by far its single-biggest operating expense.
GoPro shares now trade more than 90% below their IPO price, underscoring how closely investors should scrutinise how a company plans to deploy the capital it raises from going public.
