Is it worth investing in IPOs?

Will 2021 be London’s year of the IPO? After a quiet few years for the FTSE – a sharp contrast with the NASDAQ’s seemingly unstoppable IPO mania – it looks like things might finally be on the turn, as the City looks forward to its biggest list of debutantes in years.

Indeed the much anticipated IPO rush – which is set to include lockdown champions Deliveroo, beer chain Brewdog, and cyber-security unicorn Darktrace – has already begun. At the end of January, the FTSE welcomed two new entrants whose names will be familiar to most investors: customised card producer Moonpig and the ever-iconic Dr Martens (the latter touted as a hot pick by The Spectator’s Sam Leith).

As is usually the case these days, both IPOs caused a flurry of excitement. By the time both had officially joined the exchange – making their stocks available to DIY investors for the first time – their shares had risen 20 per cent beyond the official IPO price.