IPO stands for the initial public offering whereby private company conduct their first issue of stock sales to the public. The CEO and their board would hold on to majority stakes to ensure they still have sufficient control of the company business plans.
There have been many exciting IPO in the past few years. A few of them very successful and plenty more underperforming. From Ferrari to SnapChat and Spotify to Dropbox, where the future and sustainability of these companies are still questionable. Looking back ten years ago, Facebook and Netflix suffered waves of backlash before coming out dominating. Not many companies have the perseverance to stand the test of time.
There are two reasons why I do not participate in IPO shares at launch. First, the media and financial institutions overhype causing the price to rocket and value the company worth years ahead of its expected company value. Secondly, the volatility price swings are aggressive for the first year of business.