Mark Hulbert: This snap judgment about Snap’s IPO is wrong

CHAPEL HILL, N.C. — Snap’s extraordinarily successful IPO earlier this month doesn’t mean we’re in another internet bubble.

Those who are insisting to the contrary are more interested in the shock value of saying so than on an objective analysis of the facts.

For a comprehensive analysis of what light the IPO market can shed on the presence or absence of a bubble, I turn to research conducted by Malcolm Baker, a professor at Harvard Business School, and Jeff Wurgler, a professor at New York University. Among the sentiment indicators they found to have forecasting value, from a contrarian perspective, are two related to the IPO market: The number of IPOs recently coming to market, and the average gain of those IPOs on their first day of trading.

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