Now some IPOs can go well - Facebook and Google being prime examples!
However, 'accredited investors' who have the capital and networks to invest early into a lot of these companies have an incentive to cash in at IPO.
Also, Venture Capitalists (VCs) are incentivized to exit to boost the performance of the fund, which helps them to raise their next fund.
As a result, always Do Your Own Research (DYOR) and make sure that you understand the risks of investing at IPO.
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