Yelp Puts IPO ETFs Back in Focus | ETF Trends

With shares vaulting over 70% on the first day of trading, Yelp Inc. (NYSE: YELP) is the latest company to successfully launch its initial public offering after a prolonged dry spell in the new offerings space. Investors may also gain exposure to new offerings through IPO-related ETFs.

Yelp’s shares jumped as much as 73% on its first day of trading, generating $107.3 million in the IPO, according to Bloomberg.

However, new IPOs don’t immediately enter the ETFs. For example, the tracking index for First Trust IPOX-100 (NYSEArca: FPX) screens stocks, and IPOs are only able to enter the benchmark on the close of the sixth trading day, according to the ETF’s prospectus.

An IPO is an offering to the public to purchase shares of a company usually in an attempt to raise more capital. By getting in first, investors can be well situated at the start of a potentially uprising company. [Facebook and the IPO ETFs]