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Anatomy of An IPO

Anatomy of An IPO

 

An Initial Public Offering  – or IPO  – is simply the first time a private company sells shares to the public, turning it into a stock anyone can buy. There’s nothing quite like IPO season — it’s part celebration, part lottery, and part spectator sport. Investors clamor to see who will win the “Super Bowl lottery” and score a seat — or shares — at the opening bell. The rest of us? Well, we get to watch from the parking lot

How can investors participate?

First, you’ll need a brokerage account with IPO access — not every firm offers it, so a little homework is required. From there, you request shares before the stock starts trading, then cross all your fingers and all your toes. Institutional buyers are first in line; small investors are at the bottom of the food chain. Demand almost always outstrips supply, so a partial allocation (or a polite “sorry, no shares for you”) is far more likely than getting everything you asked for.

Trading Day

If you score shares, they’re sitting in your account before the bell even rings. What’s interesting is that the stock doesn’t just start trading at 9:30 like everything else. The exchange runs a price discovery auction, sometimes lasting for hours, while institutions submit buy and sell orders to settle on what the stock is really worth. Once it opens, you know your profit or loss instantly — and you’re free to sell immediately

Pop and Drop

This is the IPO hangover nobody wants. The stock rockets up on pure hype and FOMO, feels unstoppable for a few hours or days, then the party ends  – reality (also known as earnings) shows up, and it quietly drifts back down. The winners are usually the ones who got shares at the IPO price and sold during the party.

Cue the SpaceX IPO

SpaceX (SPCX) is a textbook case. IPO shares, priced at $135, surged to $160.95 on day one, then climbed to an all-time high of $225.64 by June 16 — a 67% gain in four trading days! Then gravity hit. By June 27, SPCX closed at $154.60, leaving anyone who bought at the peak down roughly 31%.

The takeaway

The best IPO returns rarely belong to the investors at the opening bell — they belong to the people who believed in the business long after the confetti settled. There will always be another IPO. The question worth asking isn’t ‘how do I get in?’ — it’s ‘do I believe in where this is going?’

Please know that I am not recommending buying, selling, or holding any specific stock. Only that you believe – long-term – in what the company does … and then stay the course when things get volatile.

Plan well,
Barbara

June 28, 2026
 

Sources (accessed June 27, 2026)

 

Past performance is no guarantee of future results. Investing involves risk, including possible loss of principal. Investors should consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus and, if available, the summary prospectus contain this and other important information about the investment company. You can obtain a prospectus and summary prospectus from your financial representative. Read carefully before investing.