A Close Look at Sales Growth Around IPOs
Many recent IPOs have shown a clear pattern when it comes to their sales numbers. Before listing, several companies reported strong quarterly sales growth. In some cases, the growth looked very impressive, even showing double-digit gains. But once the listing happened, the same companies suddenly showed a sharp fall in sales growth. The numbers even turned negative in many cases. (see the image below)
This sudden shift raises natural questions about why the sales trend changes so quickly.
Why Does Growth Drop After Listing?
It becomes difficult to understand how a strong positive growth rate can turn into a negative rate right after listing. One possible explanation is that sometimes companies may push some sales earlier than usual. Sales that were supposed to be recorded in future months may be booked earlier, which makes the pre-IPO numbers look stronger. After listing, this early booking shows up as a drop or a gap, which is why the growth appears weak. There is no clear proof for every company, but when the numbers show such big swings, doubts naturally arise.
How IPOs Have Turned Into a Short-Term Game
In the current market, many people apply for IPOs mainly to flip them on listing day. The goal for most applicants is simple: get an allotment and sell on the first day for a quick gain. This has turned the IPO space into a fast trading game instead of long-term investing. Long-term investors often do not get allotments easily because of huge demand from short-term players. When they try to buy after listing, the price movement is usually very unstable in the first few days.
A Better Way to Approach IPO Investing
A safer way to deal with IPOs is to wait for the stock to list and then allow all short-term players and locked-in shareholders to exit. The first six months after listing are usually the most unstable. Once this phase settles down, the stock begins to form a clearer trend. This is the point when long-term investors can start studying whether the company is worth buying. If someone prefers trend-based investing, they can also wait for the stock to bottom out and then look for a steady upward move with proper risk control.
Why Patience Works Better With IPOs
While it is possible that a few IPOs may rise sharply after listing and never come back to lower levels, most of the time the listing price is very high. After the excitement cools down, many of these stocks fall for several months. This fall gives long-term investors a better chance to enter at a more reasonable price. Patience and timing play a very important role in IPO investing, especially when the initial phase is filled with short-term noise and fast trading pressure.
Final Thoughts
Data around sales growth before and after IPOs shows that numbers can shift sharply in a very short time. This makes it important for investors to focus on long-term stability instead of short-term excitement. Taking time to study the stock after listing usually leads to better decisions and reduces the chance of getting caught in early price swings.
