Introduction

For almost three years, I made good money by buying stocks at their initial public offering (IPO). At first, it felt like an easy way to grow my savings. I would buy new shares on the first day and sell them soon after. Many of them rose quickly and I was happy with the results.

But over time I saw a problem. Some of those stocks fell after the first few days. Others looked strong at first but lost value in the long run. I began to wonder if I was just lucky or if there was something wrong with how IPOs worked in my country.

So I decided to study the issue more closely. I collected data on over fifty IPOs from late 2023 to May 2025. I compared their returns to the overall market. What I found changed my mind. Even though a few IPOs did well, most underperformed or lost money after a few months.

In this article, I will share the key numbers and explain why I stopped buying IPOs. If you are planning to invest in new listings, this might help you avoid the same mistakes.

It Worked at First...

I bought my first IPO in late 2021. Honestly, I had no idea what I was doing. I joined just for fun because the company sounded trendy, and bubble tea was everywhere at the time. The stock was PT Formosa Ingredient Factory Tbk (BOBA), also known by its brand name, Boba King. They sell toppings like tapioca pearls, popping boba, flavored syrup, and other things you’d find in a milk tea shop. I saw the word "boba" and thought, why not?

The IPO price was Rp 280 per share, and it listed on the stock exchange on November 1, 2021. I bought a lot of lots during the offering period without really thinking much about it. I didn’t read the prospectus. I didn’t even know how IPOs worked back then.

Then something crazy happened: in just two days, the price jumped by around 55%. I sold quickly and made a profit that felt huge for someone who barely understood what they had bought.

That win gave me a sense of confidence. I thought, “Wow, this IPO thing is easy.” So I kept doing it.

My strategy was simple. I bought shares during the IPO offering and sold them on the first day. I made a habit of locking in profits quickly. However, as time went on, I got a bit greedy. I found a technique that allowed me to auto-sell whenever the stock price dropped by a certain percentage. This way, I could minimize losses and still make good profits.

WIRG, a Huge Win

PT WIR ASIA Tbk (WIRG) was a technology company focused on digital reality technologies like Augmented Reality (AR), Virtual Reality (VR), and Artificial Intelligence (AI). Their IPO seemed promising, and I decided to go for it. The company had already worked on more than 1,000 projects, including some for big international corporations. Their vision was to build the Metaverse, which was becoming a hot topic back then with Meta and all.

I went all in, and the stock price surged. Over the course of a few weeks, I saw nearly 1,000% in profit, which was an unbelievable return. I felt like I had figured out the perfect system. It was simple, and it almost always worked. I felt like I was making “free money.”

Looking back, my IPO strategy seemed like a good system that was nearly impossible to lose. I bought on day one and sold quickly. On top of that, with the auto-sell feature, I minimized risk and made profits without thinking too much. I felt confident because it had worked for so long. It almost felt like I couldn’t go wrong.

When Things Started to Change

At first, almost every IPO I joined gave me profit. Even if it wasn’t much, I got used to winning. But slowly, I noticed the profits were getting smaller. The allocated lots were getting smaller, and some stocks didn’t rise much on the first day. A few even went red before I had the chance to sell.

I started to feel uneasy. Some of the new listings that I thought would do well either barely moved or dropped right after opening. My strategy, which once felt like a cheat code, no longer gave consistent results. The “easy money” feeling was fading, and I realized I couldn’t just rely on luck or momentum forever.

As I paid more attention, I started to notice certain patterns.

One of the biggest ones was the underwriter. Some underwriters had a history of weak or failed IPOs. When I saw their name attached, the results were often disappointing. On the other hand, a few underwriters seemed to be linked to stronger IPOs.

I also started looking at the people behind these companies owners, directors, and commissioners. In some cases, they were linked to other failed businesses. Some had past involvement in scandals or questionable financial activities. A few didn’t even seem to have real business experience at all. The deeper I looked, the more I found names that kept showing up across multiple low-quality IPOs. It started to feel like the same groups were recycling shady companies through the market.

Even the business models raised red flags. Some companies didn’t make sense from the start, they had no clear product, no real competitive edge, or were operating in markets that didn’t justify the valuations they were asking for. A few were basically shell companies with inflated numbers and vague business goals. I also noticed companies with large, unusual related-party transactions. These patterns made it clear: many of these businesses were never meant to create long-term value. They were built to sell shares and cash out.

Some financial statements looked too good to be true: suddenly high profits, aggressive growth with no explanation, or weird accounting line items that raised questions. I even saw companies that had oddly timed capital injections right before the IPO. These were classic signs of trouble.

Another thing I noticed was the role of public perception. A few IPOs got hyped heavily by stock influencers on social media. They made the company sound like the next big thing. Some influencers even posted screenshots of large order, which created a FOMO among retail investors. But when I looked at the actual business model or financials, there wasn’t much to back up the hype. Often, the price spiked on day one (sometimes only for the first few hour) and then crashed once the excitement wore off.

It became clear that some IPOs were being pumped up not by fundamentals, but by sentiment and social media noise. Brokers also played a role, pushing certain IPOs hard to their clients while keeping quiet about others. I started to wonder why. Were they just chasing fees, or did they know these stocks wouldn’t hold up?

But the real kicker? The regulators seemed to be doing almost nothing. When these stocks started to fall apart, the regulators only intervened after the damage was already done, usually stopping trades only after the stock had already tanked. They rarely stepped in before the hype and the fall, allowing retail investors to get burned while the insiders cashed out.

All of this made me start asking harder questions. The more I asked, the more uncomfortable the answers became: Many IPOs weren’t built to reward long-term investors, the system wasn’t built to protect the average investor, they were built for the rich to exit.

Digging the Data

To understand why IPOs weren’t living up to expectations, I decided to take a closer look at the actual numbers. Here’s how I collected the data:

• Source: I gathered IPO data from the Bursa Efek Indonesia (Indonesia Stock Exchange) and E-IPO (Electronic Indonesia Public Offering). I used historical data available through Yahoo Finance to track IPO performance from late 2023 to May 2025.

• Period: I focused on IPOs listed between late 2023 and May 2025. This period gave me a clear picture of how recent IPOs performed.

• Number of IPOs: I tracked around 50 IPOs during this time. This sample size allowed me to draw meaningful conclusions without being influenced by a small number of outliers.

Once I had the data, I began to calculate how these IPOs performed over time, especially when compared to the overall market. Here's what I found:

Average Returns

7-Days Performance

The average return for IPOs after their first 7 trading days was 12,08% for 58 stocks. While this seems like a solid return, it’s important to note that this figure was skewed by a few high-performing IPOs, and it doesn't account for the allocated lots (which can affect individual gains). If you remove the top 10% of best performers (Which decreased the stocks analyzed to 53 stocks), the average return drops to 0.26%.

3-Month Performance:

Over a 3-month period (63 trading days), most IPOs showed negative returns. After removing the top 10% of best-performing stocks, the average return across the remaining IPOs was -9.72%. Although, with the top performing IPOs included, the return increased significantly to 14.33%.

1-Year Performance:

Looking even further out, the 1-year returns showed a clear trend of underperformance. Out of the total IPOs I tracked that has data for a full financial year, 17 out of 25 (68%) were trading below their original offer price after 252 trading days (about one year). More than a third (9 stocks/36%) had dropped more than 50% from their IPO price. Only 4 IPOs (16%) showed any positive return, and just 2 of them (8%) more than doubled in value. The average return is -6.22% for all of the IPOs.

To add more context, I also looked at rolling volatility with 7 trading days windows, which reflects how volatile or how much prices were jumping up and down. The first 7 days of volatility weren't included in this rolling analysis (since it's based on windows), but during that time, volatility was high, starting at around 10.77%. After the first few days, the volatility gradually declined, reaching around 4.6% to 5% over the next 30 days. This shows that while there were sharp initial movements, volatility decreased significantly as time went on.

This shows that IPOs were not only losing value in the long run but were also highly unstable in the short term. High volatility means that early buyers faced a wide range of possible outcomes, depending on when they bought and sold. Combine that with shrinking allocations and poor long-term performance, and the picture becomes clear: the risk was not worth the reward.

What the Data Says

The numbers gives a clear picture, while some IPOs offered strong returns in the short term, the long-term performance was often disappointing. More than half of the IPOs I tracked had negative returns after 6 months and even worse results after a year. The hype around IPOs wasn’t always justified, and I realized that, in many cases, I was taking on more risk than I had initially thought. Even though I had made money in the early days, the overall trend was not as promising as I had hoped.

Why I Stopped

At first, flipping IPOs for a quick profit seemed like a smart strategy. But as more people started using the same method, the allocated lots got smaller. It became harder to get a meaningful amount of shares. Even when an IPO did well on the first day, I only held a small portion, so the actual profit was not worth the risk and effort.

What bothered me most was how unpredictable it all became. Some stocks jumped on day one, but many others fell right after. A few even dropped below their offer price and never recovered. I started to feel like I was gambling more than investing.

The risk no longer made sense. I was putting money into companies I only knew from a piece of digital paper. There were too many unknowns. Many of the IPO companies were small, had unclear business models, or were not profitable. Some felt rushed to go public, just to catch investor attention while the market was hot.

I also began to feel the emotional weight. I checked prices too often. I felt regret when a stock I skipped went up and fear when a stock I bought started to fall. The fear of missing out was real, and it affected how I made decisions. It was very stressful.

What I Do Now

Instead of chasing IPOs, I now focus on safer, long-term investments. Most of my money goes into mutual funds, especially those that invest in bonds and money market instruments, with some of my money goes into big cap stocks. These options may not offer quick gains, but they are more stable and help protect my capital.

This change has made investing feel less stressful. I spend less time checking prices and more time thinking about long-term goals. I'm not chasing the next big thing anymore. I’m focused on growing steadily, even if it takes more time.

Final Thoughts

IPOs can be exciting, but they’re not as easy as they look. The chance to make quick money attracts a lot of people, but it also brings high risk and unpredictable results. If you're thinking about investing in an IPO, take your time.

• Read the prospectus carefully: Understand what the company does, how it plans to grow, and whether it's making any profit. Don’t just rely on hype or headlines (especially influencers).

• Join investing communities and forums: See what others are saying about the IPO. Sometimes, public opinion can reveal red flags or give useful insight that’s not obvious in the official documents.

• Don’t be greedy: Just because a few IPOs doubled doesn’t mean yours will. It's easy to get carried away by the fear of missing out, but staying calm will gives you better result in the long run.

• Learn the patterns: After tracking dozens of IPOs, I saw the same trends repeat over and over. Many stocks went bagger at first, then fall. Some never recover. The more you understand these patterns, the less likely you are to fall for the same traps.

• Buying after the IPO is often a smarter move. Once the market slows down, prices may become more reasonable, and you’ll be able to buy as many shares as you want without worrying about limited allocations.

In the end, do your due diligence carefully, stay calm, and invest with purpose.