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One-Third of AAII Members Cautious About Increased IPO Activity

This week’s special question asked AAII members what they thought about this year’s increased initial public offering (IPO) activity. Slightly more than 30% of respondents expressed a negative viewpoint, saying it was either a sign of a market top or frothy valuations. At the other end of the spectrum, more than 17% viewed the increase in IPO activity positively. Several of these members said the larger amount of IPO activity was a sign of good economic and/or business conditions. Nearly 21% of respondents said they don’t follow or don’t invest in IPOs.

Here is a sampling of the responses:

  • “It makes me cautious about the future because it might indicate frothiness.”
  • “It’s an indication that we are nearing a market top.”
  • “A vote of confidence for the economy. Companies feel this is a good time to be looking for investors.”
  • “It’s a positive indication of business growth.”
  • “Couldn’t care less. Never invested in an IPO and probably never will.”
 

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