Yipes! IPO hype can lead to risky investing

All investors probably wish they had gotten in on the “ground floor” of Apple or Microsoft or any other big success story. And, in fact, you can indeed “be there from the beginning” by taking part in a company’s initial public offering (IPO). However, the ground floor of many IPOs may be shakier than you’d think — and might not provide you with the solid footing you need to invest wisely.

Of course, not all IPOs are the same. Many large, profitable companies, seeking to raise capital, have gone public in recent years through IPOs. However, IPOs of newer, unproven companies share some character...