"That asset has already arguably been 'pumped' by VCs, and the stock market offering itself is the 'dump.'”
I read that a lot. From DZM and others. But if that's true, then there would be an ETF to benefit from it. Like "SIDO - Short IPO Day One" which would be all about taking positions that short the IPO after it peaks on the first day, longing the general market by using SPY as lending/collateral. And it would have such insane returns, it would likely then reduce/correct the value of IPOs, to the point where SIDO would no longer be super profitable. It sounds too good to be true, a simple trick to beat the general market. Thus, almost certainly, not so easy nor simple a trick can be done.
This is definitely a fair point and I don't at all mean to imply that this is systematic or universal - but it is the basic underlying dynamic. And the opportunity you're describing is real, it's just not consistent, and probably under-exploited because shorting an IPO is incredibly uncapped risk. But check out these stats - year end IPO returns in 2021 were neg (-) 19%. Returns in 2022 were negative 55%!
"That asset has already arguably been 'pumped' by VCs, and the stock market offering itself is the 'dump.'”
I read that a lot. From DZM and others. But if that's true, then there would be an ETF to benefit from it. Like "SIDO - Short IPO Day One" which would be all about taking positions that short the IPO after it peaks on the first day, longing the general market by using SPY as lending/collateral. And it would have such insane returns, it would likely then reduce/correct the value of IPOs, to the point where SIDO would no longer be super profitable. It sounds too good to be true, a simple trick to beat the general market. Thus, almost certainly, not so easy nor simple a trick can be done.
This is definitely a fair point and I don't at all mean to imply that this is systematic or universal - but it is the basic underlying dynamic. And the opportunity you're describing is real, it's just not consistent, and probably under-exploited because shorting an IPO is incredibly uncapped risk. But check out these stats - year end IPO returns in 2021 were neg (-) 19%. Returns in 2022 were negative 55%!
https://www.statista.com/statistics/914714/average-year-end-gains-after-ipo-usa/