A Word of Caution about IPOs

We’ve talked a lot about initial public offerings in this space lately. That’s because there have been so many of them.

Yesterday’s dual stock market debuts of Angie’s List (Nasdaq: ANGI) and Delphi Automotive (NYSE: DLPH) brought the November IPO tally to 12. Three more IPOs – Mattress Firm (Nasdaq: MFRM), Manning & Napier (NYSE: MN) and Intermolecular (Nasdaq: IMI) – hit the market today. Another, Digital Domain Media Group (NYSE: DDMG), is set to price today.

That’s enough IPOs to fill a Thanksgiving table. But are they truly worth a bite? That’s a question Jack Hough posed in the Wall Street Journal yesterday.

Hough writes, “Wall Street is serving up its biggest buffet of initial public offerings in six months – but the menu isn't especially appetizing.” Hough goes on to examine some of this month’s higher profile IPOs, looking at the pros and cons of each.

Hough recommends that investors add a dose of caution to their IPO plates.    

“Most (IPOs) underperform in the long run,” he cautions.

To read Hough’s full article, click here.