I backtested 44 Robinhood IPO Access deals. Why buying and holding is a trap and the hypothetical strategy that beat VOO
I got around to looking into a question I'd been curious about for a while about Robinhood’s IPO Access: if you were able to get into every IPO Access deal, would you beat the S&P 500?
I built a backtest for 44 completed deals from May 2021 to June 2026. You can check out my raw data and Google Sheet[ here](https://docs.google.com/spreadsheets/d/1Pk8mAD5li1CJM1Pzk5jH87NGfVGJAVBh4qalpBYnHyc/edit?gid=599054972#gid=599054972). This included all 47 completed deals on Robhinhood's app except for $PSUS which had a complicated bundling of $PS and two deals from the past 30 days.
**Robinhood's Flipping Rule**
Robinhood discourages flipping to maintain goodwill with underwriters and issuers. If you sell within 30 days, they may put you in a 60-day penalty box for future IPOs. So you have to decide: sell within 30 days and risk a penalty, or hold and risk post-IPO drift (see $SPCX).
# The Setup
I backtested putting $100 into each of the 44 IPOs ($4,400 total) using four different strategies:
1. Buy and hold the IPOs.
2. Buy VOO on each IPO day and hold.
3. The 31-Day Flipper: Buy the IPO, sell exactly on Day 31 to avoid the penalty box.
4. Day 31 Exit + VOO: Sell on Day 31, assume a 30% short-term capital gains tax on the profits and conservatively ignore tax loss harvest benefits, and reinvest the remaining funds into VOO.
# The Results: Strategy 4 Wins
Holding a basket of these IPOs long-term significantly underperformed broad market indexing, but pairing a 31-day exit with VOO reinvestment (Strategy 4) surprisingly outperformed. Even after accounting for short-term capital gains, it generated a +51.7% total return and had a 22.8% higher final portfolio value than pure VOO.
|**Strategy**|**Ending Value**|**Total Return**|**Median Return per Deal**|**Win Rate (% Positive)**|
|:-|:-|:-|:-|:-|
|**1. IPO Buy & Hold**|$4,711|\+7.1%|\-24.2%|36.4% (16/44)|
|**2. S&P 500 Buy and Hold (VOO)**|$5,907|\+34.2%|\+57.3%|95.5% (42/44)|
|**3. 31-Day Flipper**|$5,491|\+24.8%|\+1.8%|56.8% (25/44)|
|**4. Day 31 exit + VOO reinvest**|**$7,254**|**+51.7%**|\+37.7%|79.5% (35/44)|
Here is what the deeper analysis revealed:
**1. IPO Buy & Hold underperforms**
Holding the basket of IPO Access stocks meaningfully underperforms VOO (+7.1% vs +34.2%).
The basket's modest positive return despite a poor median return of -24.2% is driven by power law dynamics from a few very strong performers: $ARM (+409.8%), $RDDT (+396.3%), and $COCO (+339.8%).
**2. Exiting on Day 31 saves you from big drawdowns**
Holding long-term only beat selling on Day 31 in 11 of 44 deals. Exiting on day 31 saves you from the long-term bleed that plague most IPOs. Look at these swings:
* Expensify ($EXFY): +36.6% on Day 31 -> -93.6% today
* Sweetgreen ($SG): -3.1% on Day 31 -> -78.6% today
* Circle ($CRCL): +569.2% on Day 31 -> +101.2% today
**3. The Holding Period Sensitivity Analysis (7 vs 31 vs 60 days)**
I wanted to see what would happen if we played with the holding window for the flipper strategy. The data shows a sweet spot at Day 31:
|**Holding Period**|**Average Return**|**Median Return**|**Win Rate**|**Trade-off / Penalty**|
|:-|:-|:-|:-|:-|
|**7 Days**|\+24.0%|\+14.2%|72.7%|High win rate, but triggers 60-day lockout|
|**31 Days**|\+24.8%|\+1.8%|56.8%|No lockout penalty; captures post-pop stabilization|
|**60 Days**|\+16.5%|\-3.5%|50.0%|Suffers from post-hype decay & lockup pressure|
**4. The Catch: Adverse Selection**
My backtest assumes you get exactly $100 allocated every time. In the real world, Robinhood uses a lottery algorithm dictated by demand. That means you'll probably get heavily rationed or squeezed out of "hot" deals like Figma, but get fills on the less popular offerings that end up underperforming.
# Conclusion
**tl;dr:** Unless you understand and have conviction in both the business and valuation, don't buy and hold retail IPOs. If you do use IPO Access, set a calendar alert for Day 31, capture the early momentum, and reinvest the proceeds into an ETF.
**How will this analysis impact how I approach IPO Access?**
Using fun money, I've tried to participate in three Robinhood IPOs:
* Robinhood ($HOOD): requested and got \~40 shares. Still holding (+149%) which has outperformed selling on day 31 to buy VOO (+80%)
* Expensify ($EXFY): requested 180 shares, got 0 (luckily, given its 93% drop)
* Figma ($FIG): requested 500 shares, got \~60. Should have cashed out for a 98% profit on day 31, but I held and recently exited at a 35% loss.
After doing this analysis, I plan to request allocations in select IPO access stocks that I think could do well. However, unless I really understand the business and valuation, I will sell at day 31 and roll into VOO. For example, while I've heard good things about Figma, I've never used the product and don't have enough expertise/conviction to hold it instead of VOO.
*Obligatory: Not financial advice.*
