The Decibel - The risks and rewards of the IPO hype in Canada

Episode Date: June 11, 2026

There’s a surge of excitement around a few big companies going public this year – like Apotex and SpaceX both going on stock exchanges this week. These IPOs, or initial public offerings, are generating a ton of buzz – and there’s particular interest in trying to invest in a company before it goes public. Meera Raman, The Globe’s personal finance reporter, is here today to explain how Canadians are getting involved in IPOs, and the potential benefits and risks of this increase in DIY investing. Questions? Comments? Ideas? E-mail us at [e-mail] Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

There's a surge of excitement about a few really big companies going public this year. There's Canadian pharmaceutical giant Apotex, which went public on Wednesday. And Elon Musk's SpaceX is set to go public on Friday. Initial public offerings, better known as IPOs, are also expected from AI giants, Anthropic and OpenAI later this year. That means they'll be listed on stock exchanges so anyone can invest. And there's particular interest, especially here in Canada, in getting in with a private company before the company even goes public. Today, we've got Mira Rahman on the show. She's the globe's personal finance reporter.

She's here to tell us about this hype around IPOs, how Canadians are getting involved, and the potential benefits and risks of this increase in DIY investing. I'm Cheryl Sutherland, and this is. This is the decibel from the Globe and Mail. Hi, Mira, nice to have you back in the show. I always love being here. Thanks for having me. So let's start basic here and talk about what exactly an IPO is and how it works. So what is the process?

So IPO stands for initial public offering. So what that means is that there's a company that is private and it has decided to go public. And when it goes public, regular everyday people can invest in that company on the stock market. So that's what happens when a company. IPOs. What is the reasoning behind why a company wants to go public? So when a company goes public, then they can really widen their net of how many people are investing in that company and just really broaden that liquidity for them. It also generates a lot of hype for companies. Once everyone can get a piece of the pie, then people are paying attention. Yes. Okay. And we're going to really

dive into this hype in a bit. So there's a certain thing that happens with an IPO. So it launches first, right? And then what happens? Yeah. So, a company will basically launch their IPO. And that's basically them saying, hey, hello, we are intending to go public very, very soon. So there's a little bit of a waiting period before they actually start trading on public markets where an investor can actually buy a stock in that company. And so what is the reasoning behind this kind of waiting period, like between the launch and then when it goes public? What's going on in that time? So when they launch, typically, they say how much they think they're going to raise, how much they think each share is going to be priced at.

And that waiting period typically is used to gauge how much interest there is in this company and really nail down how much the stock is going to be priced at. So it's really gauging how investors and institutional investors all the way to retail investors are looking at this company so that when it goes public, they have a launch price that's accurate or, you know, seems to be accurate for what the company is valued at. Okay. So you mentioned institutional investors and retail investors, which is like the mom and pop, the you and me that could invest. And then institutionals are like the big banks, that kind of thing.

How would you say the breakdown has been and has that changed when it comes to who gets in on these IPOs? Yeah, it's a great question. Because once a company goes public, anybody for, you know, many, many years can buy that company. But before it goes public, for very long, only very wealthy institutional investors could get in on these companies before they went public. but that's starting to change.

Okay, let's talk about this. So there's something called IPO access, right? And I think that's what you're referring to. Can you explain what that is? Yes. So IPO access, what that means is that a retail investor like me and you could buy a company's stock price at their initial price before they go public. So, for example, if Apotex, like you mentioned, set their initial stock price at $24,

before they go public, you can lock in some shares at that price so that after they go public, if that price goes up or down very quickly, you still had locked in that $24 and you don't have to worry about those dramatic swings. IPOs can be very, very volatile. Once a company goes public, that price can swing very dramatically. It can go shoot up or it can shoot down. So what this gives you is some certainty. It gives you that I'm buying in at the price that I know it's going to be so that wherever price that goes, if it shoots up, I know that I got it at that locked in price. For example, we were talking about Apotex, right? So that was priced at $24. So people were able to lock in those shares with IPO access products. And today on Wednesday, it started trading.

And right when it started trading, it's already up to $28. So people have already made a profit on that. And what has the landscape look like for products like this in Canada historically? Is this a new thing? So IPO has actually been around for a while. For example, Quest Trade, which is another fintech platform, they have offered this product for actually over a decade. But right now, there is a lot of interest in this product because, as you mentioned, many high-profile companies that are attracting retail investors are about to go public. So there is this newfound hype for these products. And with WellSimple, one of the biggest companies in Canada that really draws in retail investors

launching their new product, everyone's paying attention. How does it work to get this IPO access in Canada? Like what's going on here right now? Like what are the companies that are offering this? Yeah. So let's talk about the most recent one that is, you know, attracting a lot of attention. So in late May, Well Simple, an online fintech announced it was launching its own IPO access product. So how that works is retail investors can request shares in select Canadian and US companies

at their launch price before public trading begins. Well Simple hasn't said exactly all the companies that they're going to offer, but that's how it works and that's the newest products that people are really paying attention to. And then what happens when it comes to how many shares there are available for people? Do we know how Well Simple works with that? Yes. So when an investor is interested in getting these shares, what they can do is that they actually request shares. So how Well Simple even gets these shares is that they're working with investment banks. And these banks allocate Well Simple a certain amount of shares for each company. And then Well Simple distributes that to retail investors. But here's a thing. You can request 500 shares, but you may only be allocated 100 shares or even none at all.

Oh. Because if demand exceeds supply, then that means that you don't know how much you're going to get. And when you actually find out how many shares you're going to get is not until the day it goes public. Very interesting. So Well Simple might not be able to fill everyone's request and they won't find out until the day that the company goes public. What companies does Well Simple offer right now? Right now they are offering Appitex and SpaceX. So two very high profile companies, one Canadian company, one U.S. company. Typically, Canadian companies can only offer retail investors, IPO access from companies that file a thing called a prospectus in Canada. So when we were thinking about what companies that places like Well Simple were going to be able to offer, people

weren't sure if SpaceX was going to be offered, but actually SpaceX filed a prospectus in Canada in May. So that means Well Simple was able to offer it. Yeah, that's really interesting because you would think that, you know, Canadian companies would be offered here, but there's a bit of an extra step for U.S. companies. And so that is the step. They have to file a perspective. Exactly, a prospectus, which basically outlines the financials of the company, how the company works so investors can learn about it. And really, American companies don't often file prospectuses. Is that the plural form, prospectus I, in Canada? So space-s filing a prospectus in the country really opens that up to our investors. It's very interesting. I mean, I'm going to make an assumption that perhaps that just means that SpaceX is looking for the biggest amount of people to invest as possible. It's definitely, you know, looking to retail investors to get excited about their IPO. How does Well Simple make money from this?

Like, are they charging fees to consumers? Well Simple hasn't really given any interviews on their new product. But in their press release, they said that there's, first of all, no minimum order size on what you can request. And there's no additional fees is what the press release said. So we don't know the details of how the structure works and how they make money. and it's intentionally opaque, right? A lot of brokerages aren't going to break that down for people. But what I can say is that this product, which is very appealing to many investors,

gets a lot of new folks into the door, right? And into Well Simple's ecosystem. So it's bringing in new customers one way or another. How does this compare to the products that are offered in the U.S.? So the U.S. also has IPO access products, but these things called venture funds in the U.S. are also like popping off right now. They are very, very popular. So these venture funds pool money from investors and buy stakes in private companies before an IPO happens. So instead of what we've been talking about,

IPO, me, a retail investor requesting shares for one single company, a venture fund, you would own a part of a fund that owns pieces of many private companies. So it's kind of just on a different scale, but these have just skyrocketed in the U.S. Mirra, you spoke with some people who are buying into this new product from Wealth Simple. What did you hear from them? First of all, when Wealth Simple dropped this product, there was a lot of hype over subreddit and Twitter where I am constantly on. And when I'm looking for sources for a story, sometimes it takes me a little bit, right? I have to, you know, poke around, post places.

It was extremely easy to find people for this story. I had to write the story very quickly and I find three people that were willing to talk. about this very easily, which shows you how many people are getting involved in this. Okay. Yeah. I was going to ask you, what does that tell you that so many people were excited to talk to you? Yeah, so many people not only excited to talk to me about it, but like there was, I was inundated with emails of people who were interested in this product. What did they tell you? So you spoke to three people? What did you hear? So the biggest things that I got from all three of them actually were that, you know, they weren't actually initially really interested in getting in

on these IPOs, but because they got an email in their inbox about this product, they were like, like, hey, this sounds interesting, getting in on a company, let me try this out. And a lot of them actually, because all three of them had invested in Apotex or requested shares in Apotex. And a lot of them actually wanted to use Apotex as kind of a trial run before SpaceX is offered. At that point, Well, Simple hadn't offered SpaceX yet. And they'd really heard about that one. So they kind of wanted to do somewhat of a trial run before getting into SpaceX, which has a lot of hype around it right now. Would you say that the people that you spoke to and also, the people that you found on Reddit, were they mostly interested in SpaceX?

Because Appetects was kind of this trial run. But is SpaceX the one that is getting really a lot of people excited? At least when I talked to these folks, they were really excited about SpaceX. For Apotex, they were excited because they're all Canadian. So they're excited to, you know, first get in on a Canadian company. But really, it was SpaceX that was getting them pretty excited. What does it mean for the companies going public that people are doing this, getting in on early access?

It can be great for companies to have a lot of attention from retail investors, but for the everyday person, it can backfire for them. We'll be right back. Okay, something we're kind of talking around here is hype, right? And there is a lot of hype around IPOs recently and also just getting early access to these IPOs. What's going on here? So to answer that question, we need to go back a couple years. So Canada's capital markets have actually really struggled to attract IPOs in recent years. A good amount of companies have gone public, but they've done pretty badly after they've gone public.

Their prices have dropped. For example, Cerebra Systems, a chip company, was priced at $185, shares open to the public, jumped to $350. But the next day, shares fell 20%. Oh, my goodness. So talk about volatile. right? So there's been a lot of, you know, uneasiness a little bit around IPOs over the last year. But now that the economy is picking up, now that things are, you know, feeling like more mature, a lot of these companies who have been preparing for IPOs for years are now going public. And they are really saying,

hey, anyone can get in on this. Anyone can get a piece of the pie. So that everyday person who feels like they want to have their shot at making money, they feel like this is for them. So we talked about how some of the people you spoke to on Reddit, they found out about companies going public through email. What else are people seeing? Like, is there a social media aspect to this as well? Yes. A big reason that's driving a lot of this hype around IPOs is social media, right?

People getting these notifications on their phones and then going and posting about it on Twitter or making a video about it on TikTok, and it is just permeating onto people's algorithms. If they had no idea what SpaceX was, they do now just because they opened their phone. So I think we've laid out the hype and why people are getting excited, why people want to get in on these companies even before they go public. But what about the companies themselves? Like, why are they wanting to get interest from retail investors or from like such a wide pool of people? Why companies want retail investors to be attracted to their IPOs is because not only does it improve liquidity, getting more people in on their investment, but it also generates buzz, right? Especially when people have a stake in something, when people have money behind it, because if a company's being talked about at a dinner table as opposed to just behind closed doors, that's a big win for companies.

Okay. You talked a little bit about this earlier, but I want to kind of like zoom in on the risks, right? hype is there. Companies are wanting to get a lot of people involved. But what are the risks with so much hype around these IPOs? So we already talked a little bit about how volatile these IPOs can be, right? These prices can swing dramatically. And I found a really interesting study actually that talked about, you know, how these companies that offer access to retail investors actually perform. So this is a 2025 study from researchers in the U.S. and China. So, They found that IPO access products that offer shares to retail investors at the same price as institutional investors actually underperformed those not offered to retail investors by roughly 20 percentage points during their first year as public companies.

So that is a lot, 20 percentage points. The researchers attributed this gap partly to more aggressive pricing because a lot of people are getting in on it, but partly also to attention-driven retail trading. with investors piling into offerings that generate online buzz. What did the researchers say about why having retail investors getting in on IPO access would impact their performance or value? So once hype, if hype is already built before a company goes public, that means that there's going to likely be an even volatile, more volatile swing once it goes public. Because there's already so much attention on it, it's going to shoot that price up, possibly overvalue a company. And then once things course correct, because things always course correct, it's going to

shoot back down very sharply. So this roughly 20 percentage points is during their first year's public companies, right? So it's really looking at over time how these companies perform. And it's really showing that they were overvalued soon after they went public. Okay. Yeah. Okay. So that makes sense.

So the study is kind of indicating that early IPO access, especially for retail investors might influence overvaluation of a company. Exactly. Okay. This feels like it's part of a trend of more DIY investing where people are excited about IPOs and also prediction markets and kind of taking investing into their own hands. What do you make of that? Yes.

I feel like DIY investing has been like so much of my life recently and how so much of what I focused on, which it's so interesting, especially because DIY, do-it-yourself investing has exploded. in recent years, especially with a whole new young generation of people who can trade from their phones. So we're seeing people really get into crypto, into meme stocks, into prediction markets, exactly like you said. And when I talk to people who are really interested in this, yes, they want to be able to take control of their own finances, but they also want to be able to chase faster gains in this DIY investing because they feel like the traditional pathways to

wealth, like buying a house, having a stable job. Those aren't. really options for them anymore. So they're like, okay, let's try these other options, which may be riskier, but it's worth it for me because the other options don't look so appealing. Okay. So it sounds like people are leaning into the risk because of kind of the climate for them when it comes to these other long-term investments. But I mean, is it risky for people to do it themselves? Like, is there kind of a sense that perhaps using a financial advisor might be kind of a better way of going about this? Yeah, it's such a good question because as much as we can say, it's risky, it so depends on the investor. You can be a do-yourself investor and be extremely educated,

do your research and have a portfolio that's going to do as well as if you had an advisor managing you, right? Because you're educated and you know how to diversify that portfolio. So there are a lot of people like that, especially because this young generation is more educated on finances than any generation before because of the access they have to information. While there is a lot of misinformation, they do have a lot of good information as well. So, that's actually, you know, getting a lot of financial advisors, you know, a little sweaty because they're like, oh, no, we're losing clients. But actually, you know, these financial advisors that are fee-only advisors or advice-only advisors, which means the owner, they don't take a cut of your

investments. They just kind of charge you per hour. They're kind of spiking in popularity. So we're seeing so many trends ripple effect from from DIY investing. How does the financial establishment feel about the rise of DIY investing? Yeah, it's really interesting because I think some institutions are meeting people where they're at, right? They see that this is a trend and they're aiding people and some people are, you know, a little slower to be able to meet this moment. So you can see like really traditional financial advisors now getting on TikTok and trying to, you know, attract an audience on there. So I think we're still in really early days of how this is going to affect things long term. But I would say that's going to change the financial advising landscape

greatly, especially as Gen Z really comes of age. Okay. So for the people that are doing this DIY investing and, you know, when we're talking about IPO access and other versions of DIY investing, what are the biggest lessons for people thinking about this? When I was reporting this story, the biggest thing that I learned is that it is so easy to get caught up in hype. Like literally from just being on your phone where you need to contact your friends, probably do your job, it's so easy to just like get notification.

of companies, of going on Instagram and seeing something that you need to invest in. So I would say a big lesson is put the phone down, try to go outside if you can, touch grass, and try not to get swept up and stuff. You know, really evaluate before investing in one of these products. If it's right for you, don't just do it because someone told you to do it, right? Take that agency into your own hands, and that's the beauty of DIY investing is you get to make the choice. Don't let someone else make that choice. Look at your long-term plan.

Is this a company you actually do? want to hold long term, do you believe in their success? Are you really knowledgeable about this company? Then maybe, yeah, maybe it is right for you. But if you have a lot of your portfolio already in tech, maybe you don't need to get another, you know, company that's involved in tech. Maybe you should diversify. Explain why that's important. So diversification in a portfolio is always important. If you have all your eggs in one basket, let's use tech and tech, you know, faces some hard times, then that means your whole portfolio is going down with it. So you really, really want to be able to diversify that portfolio. And that comes across all products,

including IPO access products. You mentioned something there as well that I want to pick up on. He said long term. And I think that some things we're talking about here is like we're seeing something and this feels like a short term excitement. So should people be thinking about more long term versus short term? Definitely. All the advisors I talk to were saying that if people are interested in these products, they should be interested in over the long term. Because there is this thing called an IPO pop where right when a company goes public, the share price skyrockets, right? And that gets people excited because they're going to make money. But it's, again, volatile and risky. Right? So advisors I talked to said that if you're getting in on this, you should want to hold it

long term. And actually, Well, Simple and, you know, many other companies that offer these products have some safeguards to protect around this. For example, if you do try to sell or transfer your shares before 90 days, then Well Simple will bar you from participating in future IPO access products. Patience. Patience. Exactly. Mira, always great to have you on the show. Thank you so much.

Yeah, this was so great. Thank you. That was Mira Rahman, the Globe's personal finance reporter. That's it today. I'm Cheryl Sutherland. Our associate producer and intern is Cynthia Jimenez. Our producers are Madeline White. Rachel Levy McLaughlin and Mahal Stein.

Our editor is David Crosby. Adrian Chung is our senior producer, and Angela Pichenza is our executive editor. Thanks so much for listening.