[executivevice]

Because they (should) have sophisticated risk models that account for the long tail. If even a few ipos become Google or Facebook, the risk is worth it. But for average retail investors ipo participation will be bag holding exercise. That said betting your conviction is one of the only ways to beat the market, even if it comes with additional risk (emotional+intellectual attachments). If you really believe in ai or space exploration, the upcoming ipos represent an opportunity to bet on your beliefs and predictive capability

[pas]

you mean that if average Retail Ronnie directly buys the new hot stock at IPO versus getting exposure to it through whatever ETF they have?

yes, directly buying a stock at IPO sounds really strange for me. (because either you know it's undervalued, but then it's insider trading. if not, then why compete with irrational fanatics?)