New Findings For Above Market Returns In The IPO Quiet Period

Jan. 05, 2015 11:33 AM ETMETA6 Comments
Don Dion profile picture
Don Dion


  • We continue to see IPO quiet period expirations as points around which to build profitable trading strategies.
  • Our updated sample has increased from 118 companies (August 2014) to 258 companies.
  • First option is holding an IPO (not a REIT or bank) in the day (-11, 0) window); the quiet period expiration is day 0, with (-11) being 11 days prior.
  • The second is holding for days (-5, +2), excluding REITs, banks, and those companies, which have gained > 35% from pricing to day -6.

Introduction to the Updated Report

We first published our findings on above market returns at the IPO quiet period expiration in August 2014. (For an explanation of the quiet period expiration's meaning, please see the 'background' section below.)

Then, the holding period with the best combination of performance and statistical significance was the window of (-5, +2) days. The notation uses the quiet period expiration as day 0, with days before as negative numbers and days after as positive numbers (start of period, end of period).

The initial sample included 118 companies, which had gone public in 2014.

Now, at the end of 2014, our sample includes 258 companies, and the new data has necessitated a slight shift in our conclusions.

Along with our research on IPO lockup expirations, we have appreciated the intelligent feedback from many Seeking Alpha readers and hope this report continues to spur discussion.

Quiet Period Report Update - December 29th, 2014

Key Observations:

· Performance has increased for some groups and decreased for others. Previously, the time period with the highest returns was (-5, +2); now it is (-11, 0).

o Most notable among the groups that have decreased is the (-5, +2) group for the sample that excluded REITs and banks. This was noted as the most promising group in the original report. Prior to the update, it had returns of 2.7% and a p-value of .056620. Now, it has returns of 1.7% and a p-value of .042767, meaning lower returns yet higher statistical significance.

§ It was noted in the original report that the group that also excluded stocks that increased by more than 35% from pricing to day -6 had higher returns of 3.0% but a less significant p-value of .061885, so choosing to exclude such stocks could be considered.

§ After the

This article was written by

Don Dion profile picture
Don Dion is the CEO of Inland Management, a company focused on acquiring, subdividing, developing and marketing large tracts of land on the fringes of major metropolitan markets. Inland Management has sold land in all 48 contiguous states totaling billions of dollars. As CEO, Don is responsible for helping to maintain and enhance the firm’s strong financial position and identifying opportunities for growth. In addition to his role at Inland Management, Don Dion is the Chief Investment Officer of DRD Investments, LLC. Based in Naples, FL. and Williamstown, MA., DRD Investments is a family office focused on managing a long/short hedge fund, real estate, venture capital and various other financial assets for the Dion family. Don also serves as the trustee of the Dion Family Foundation, which focuses on helping individuals with tuition assistance at Catholic Institutions for grammar school, high school, and college education. The foundation also helps individuals by supporting Massachusetts General Hospital. Don is on two leadership boards and advisory committees at Massachusetts General Hospital and the Home Base Program (a partnership between Mass General and the Red Sox Foundation). He consults with Saint Dominic's Academy and serves as a trustee of Saint Michael’s College. Previously, Don was the founder and CEO of Dion Money Management, a fee-based investment advisory firm for affluent individuals, families and non-profit organizations. Founded in 1996 and based in Williamstown, MA. and Naples, FL., Dion Money Management managed approximately one billion in assets for clients in 49 states and 11 countries. While at Dion Money Management, Don was responsible for setting investment policy, creating custom portfolios, and overseeing the performance of client accounts. Don sold the firm to NYC-based Focus Financial Partners (FOCS) on September 1, 2007 and no longer manages money for other families or institutions. Don remains a shareholder of Focus Financial Partners (FOCS). Don is also the retired publisher of the Fidelity Independent Adviser family of newsletters, which provided a broad range of investor commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With nearly 100 thousand subscribers in the United States and 29 other countries, Fidelity Independent Adviser published two monthly newsletters and one weekly newsletter. The flagship publication, Fidelity Independent Adviser, was published monthly for 16 years and reached over 60,000 subscribers. In 2011 Don and his daughter Carolyn co-authored the Ultimate Guide to ETFs, available on Prior to founding Dion Money Management, Don co-founded Litchfield Financial Corp. (LTCH) with Summit Partners. Don served as Chairman and CEO of Litchfield, which was listed on the Nasdaq in 1992 and acquired by Textron Corp. (TXT) in 1999. Don was also the Executive Vice President, CFO and General Counsel for Patten Corporation (BGX) from 1986 to 1988, where he played a critical role in the company’s successful initial public offering on the New York Stock Exchange. From 1983 to 1985, Don was a corporate lawyer with the Boston Law Firm of Warner and Stackpole. Before joining Warner and Stackpole, Don worked as a C.P.A. for Ernst and Young from 1979 to 1983. Don graduated with honors from Saint Michael’s College in 1976 with a B.S. degree in Economics and Business Administration. He received his J.D. from the University of Maine Law School in 1979 and his LL.M. from Boston University Law School in 1982. Don can be reached at

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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