Does it pay to get in on IPO's?

There's a flood of IPOs coming in Australia before Christmas, but Stephen Wood from Eiger Capital questions if it's the right time to jump in? He's crunched the numbers and says you don't have to buy because of FOMO (Fear of Missing Out) and perhaps you shouldn't. His analysis suggests that the information “optimism” naturally inherent in an IPO process fades when you get a period of 1-2 years of weak share price performance. For example, Stephen says an analysis of the more than 2000 IPOs in the past 20 years reveals median underperformance versus the small cap benchmark of 12% over 2 yrs. The alternative for Stephen is the small cap space and he points to the performance of Life 360 with a market cap $1.5 billion and Nitro Software, market cap $700m. He says both reported their September quarterlies this morning with both reporting strong revenue growth. Both listed in 2019 and Stephen says 360 fell from its IPO price of $4.79 to $2 in mid 2020. It's now $10. It took 2 years to recover its IPO price, while Nitro's IPO price was $1.72 and traded around $1.50 prior to COVID and is now $3.55. Stephen's point: You had 6 months to consider, research and observe the company's performance, an opportunity not afforded investors at an IPO.