Why Most New IPOs You 'Can't Miss' Will Crash

Ken Fisher warns that most new IPOs are overpriced and underperform the market. He presents historical data from 1990 showing that 70% of IPOs lagged the S&P 500 after one year, with a median gap of 20 percentage points. Examples: eToro fell 50%, NaaS Pharma 68%, Navan 59%. Fisher urges caution against hype and recommends patience and research.

Ken Fisher, founder and chairman of Fisher Investments, warns investors against the hype surrounding new IPOs, especially in technology and artificial intelligence. He argues that most IPOs are overpriced due to the interests of founders and banks in maximizing the offering price, while retail investors are left with stocks that underperform the market. Fisher presents historical data from 1990: 52% of US IPOs lagged the S&P 500 in the first month, 60% after three months, 63% after six months, and about 70% after one and two years, with median gaps of 20 and 35 percentage points respectively. He cites Israeli examples: eToro dropped 50% from its peak, NaaS Pharma fell 68% since its first trading day, and Navan plunged 59% from its closing price on IPO day through the end of March, and despite a recovery, it still lags the TA-35. Fisher notes that even SpaceX, after an initial surge, erased almost all gains and its return is similar to the S&P 500. He calls on investors to avoid overconfidence, prefer research and patience over attempts to time the market, and focus on real investment rather than get-rich-quick schemes.