Renaissance Capital maintains a list of the largest 25 IPOs in U.S. history. Aside from $BABA, whose massive offering today perches the company atop the list, there are three examples of companies that raised more than $10 billion in primary market equity capital that still trade on the NYSE: V, FB and GM (in order of deal size).

Of interest, the norm seems to be for shares of such companies to rally out the gate (over the following zero to three months), and then to correct for more extended periods.

For investors inclined to buy shares of mega-IPOs in the secondary, a simple rule of thumb of waiting a year before taking the plunge would have increased buy-and-hold returns significantly in each case: V shed 11% during its first year of trading, FB dropped 18% and GM got slammed to the tune of a 38% decline.

Also of interest, not only would the ‘wait a year’ approach have offered lower cost entry points versus buying immediately when these stocks started trading, but adherents to this strategy would have gotten in at around the lows in each case too.

Admittedly, a sample with a size of three hardly provides definitive guidance, however the consistency of the price path of $10bln+, listed IPOs during the first year of trading might suggest it prudent to not chase $BABA at present.

V

FB

GM

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