IPOs are rigged. They’re set up so that the banks who underwrite them can get their best clients in before the stock inevitably pops.
This reality does not, however, keep traders from trying to take advantage of that pop. It doesn’t always work out.
For example, according to SigFig, most people who bought and then sold Groupon stock during its IPO lost money. Just more than 1.16% of them got a 10% return.
Traders who played the IPO game with LinkedIn were more likely to be winners. Only ~5% of them lost money. A tiny slice of them – 0.76% – actually doubled their investment.
SigFig made a cool chart to illustrate all this: