Pinterest And Zoom IPOs: 5 Signs Investors Should Watch

As the companies seek to go public Thursday


18 Apr, 2019FORTUNE.COM

BEAM - Pinterest And Zoom IPOs: 5 Signs Investors Should Watch | BEAM

With a spate of high profile IPOs set to debut --including Pinterest and video-conferencing firm Zoom listing Thursday-- investors may be tempted to dive in.

But history suggests a second look for long-term investors. In a study of IPOs between 1980 and 2015, newly public firms on average rose 7.4% in their first year on the market, underperforming companies of a similar size which returned 11.9% in that time frame, according to Jay Ritter, a professor at the University of Florida. That trend persisted into the fifth year of a company’s public life. That said, long is the list of investors who wished they had bought Amazon or Google back when they first when public. With that in mind, here are five factors investors should keep in mind as the IPO market keeps rolling....

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