Carter Worth's Alibaba Group Holding Ltd Analysis

Speaking

, Carter Worth analyzed the average IPO's price action. He showed a couple of charts and concluded that the price movement after the IPO depends on the economic conditions in the year of an IPO and that it is also important how well the stock performs on the first day. On average, in the last 10 years IPOs had the worse performance in 2008 and their best performances were recorded in the last three years. Worth said that IPOs hadn't performed well in the 1980s, but were very successful in the 1990s, and especially in 1999, with a return of 64 percent in the year after an IPO. The average return in the last 40 years is 17.9 percent, according to Worth's analysis. IPOs that performed well on the first day had a pretty successful first year, like

and

. These companies had a 33.3 percent and 29.7 percent change in the first day and 239 percent and 298 percent change in the first year, respectively.

gained 72.7 percent on the first day and closed the year 98 percent higher, but

added only 0.6 percent on the start and declined 28 percent in the first year. Judging by the first day,

could be compared with

and

as it gained 38.07 percent on Friday. Worth concluded his analysis by saying that the examples above are for the very prominent names and their results are exceptional. On three-year basis, most of the IPOs underperform the market on relative basis.