KPO recently met up with a group of friends. We are all working for different companies now and 1 of them works in SGX. I laughed at him claiming that he is one of the directors for those companies cause I have seen him appearing at IPO events, taking photos, etc on the SGX FB page - SGX | My Gateway. He then made an interesting comment stating that all IPO will make money (sell on the opening day). How true is it?
KPO went to SGX website and found a page where past performances of the IPOs are being tracked! Unfortunately, SGX only provides data for the last 3 years, hence that limits my analysis (it would have been great if we can see how did IPOs perform during the financial crisis). I spent some time to clean up the data and present to you the following tables and conclusion which ...
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Your SGX friend told you that all IPOs make money on opening?
Not true, many have lost money. Strait Times had an article on it perhaps about ten years or more back. My private placement-IPOs also lose money.
Hi Fred,
It was just a passing statement and he wasn’t there for long, not to mention 10 years. lol. However, based on the last 3 years of IPO data, it seems pretty true. I am guessing your private placement lost money because you are still holding on? The assumption is that you sell on the first day, not hold it. At the end of the day, not all investment will make money right? Hope you make money for your next IPO! Huat ah!