The Internet IPO Myth

Not all that long ago, the exploding oil rig was the get-rich symbol for America. Whether portrayed as the result of Jed Clampett's lucky misfire or a gag in a New Yorker cartoon, it was the universal graphical representation of unimaginable found wealth (like a 1977 drawing of a mini-oil rig gushing in the middle of some guy's apartment. Says he: "It's a mixed blessing").

Today's mixed blessing is the Internet IPO: While a few have indeed surged, to the average investor the average Internet IPO over the last seven months has lagged behind the Dow Jones Industrial Average. There you have it, the shocking, shocking truth.

The headlines, of course, scream with the one-day successes of these offerings. Investors Go Wild for IPO From MarketWatch.com (MKTW Quote). EarthWeb (EWBX Quote), theglobe.com (TGLO Quote) Defy IPO Gravity. What happens next is soon forgotten. But a close look reveals that this modern representation of fast money doesn't add up when the numbers are crunched. ...