Financial Planning Tip June 2026

June 2026

We've written about our dislike for IPOs (Initial Public Offerings) in the past, most recently in Q3 2019  when we discussed "The Extinction of the Unicorns." Well, the unicorns are back, but instead of Uber, WeWork and Peloton, we're discussing SpaceX, Anthropic, and OpenAI. 

Recently, Barron's published an article titled, "The SpaceX IPO Is a Game You Play at Your Own Risk." Alongside the author's total repudiation of any reasonable basis for investing in SpaceX were some interesting data points. Of the ten largest IPOs in history, all but two have performed significantly worse than the broader market since their stock-market debuts, with the median IPO trailing the S&P 500 by 127%. In other words, if an IPO investor is proud of his investment's 20% return after a few years, the broader market has most likely returned 147% over that same time period. This dismal performance isn't just limited to large IPOs. A NASDAQ study from 2021 found that almost two thirds of all IPOs underperform the market in the three years following their debut. 

If you find a new company that you think presents a great opportunity, we'd be happy to kick the tires a bit. But in most cases, our clients are better off waiting a few months or even a few years after the IPO to make their move. As for our derisive take on the unicorns from 2019? Barron's reports that Uber is trailing the S&P 500 by 112%; Peloton is trading for one fourth of its IPO price, and WeWork went bankrupt in 2023. Play at your own risk, indeed!