IPOs: who captures the first-day pop

$47.4 billion of US IPO proceeds across 216 deals, versus $33 billion across 176 deals in 2024, is EY's snapshot of a market that is open again ey.com, but that says more about supply than about who benefits. Ritter's 1960–2025 underpricing tables track first-day returns and aggregate money left on the table site.warrington.ufl.edu, which offers a useful lens on the latest rich-valuation IPO narrative: a strong open may reflect the pricing mechanism itself rather than evidence that aftermarket buyers got favorable entry. For retail investors, the key distinction is offer allocation versus post-open access. The scarcity premium is typically created at pricing, while the public often encounters the stock once that gap is already visible on screen. Ritter's long-run returns research also suggests IPO cohorts have historically tended to lag seasoned equities after listing site.warrington.ufl.edu. If fresh deals begin opening flatter, the allocation advantage may be shrinking. Macro does not provide investment advice.

$47.4 billion of US IPO proceeds across 216 deals, versus $33 billion across 176 deals in 2024, is EY's read on an issuance market that is active again ey.com. Historically, active issuance has tended to revive the allocation trade before it meaningfully changes outcomes for retail investors.

Ritter's 1960–2025 underpricing tables site.warrington.ufl.edu are a primary-source reminder that first-day strength may be built into the mechanism. According to the academic literature Ritter surveys, issuers can tolerate money left on the table in exchange for a cleaner book, underwriters may benefit from stronger aftermarket support, and institutions that receive offer-price stock are positioned to capture the initial scarcity premium.

That framing matters for anyone watching from outside the book. A hot deal can print well on day one and still leave later buyers with a less attractive setup once the gap from the offer to the open has already been realized.

None of that makes every IPO a poor investment, but Ritter's long-run returns research suggests IPO cohorts have historically tended to underperform seasoned equities after listing site.warrington.ufl.edu, so the opening pop and the medium-term return can be very different propositions. If coming deals start opening with less of a pop, the market may be competing away the scarcity premium rather than handing it to allocators.

Macro does not provide investment advice.