Abstract
The majority of stocks that went public during 1975–2020 do not outperform one-month T-bills. Only 38.65% of the IPOs have a lifetime buy-and-hold return higher than T-bills. In terms of creating wealth for shareholders, the top 365 performing IPO firms (3.23% of the total) account for 100% of the total net wealth creation. The remaining 10,947 IPO firms (96.77%) collectively earn the risk-free rate in their lifetimes. Consequently, the wealth creation in the IPO market is highly concentrated in relatively few top-performing IPO firms.
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