How to invest in US IPOs from the UAE
The US listing market started 2026 slowly and then had a record second quarter. Renaissance Capital counted 48 IPOs raising $104.8 billion between April and June. SpaceX accounted for $75 billion of that on its own, more than all US IPOs from the previous two calendar years combined.
For an investor in the UAE, getting shares at the offer price in a deal like that is difficult, because most of them go to large institutions. Buying a newly listed company after it starts trading on the New York Stock Exchange or Nasdaq is far more accessible. It is generally available through providers that offer US-listed stocks, subject to their eligibility rules.
What an IPO is and how a US listing works
An initial public offering is the first time a company sells its shares to the general public. A US company first has to register the offering with the Securities and Exchange Commission, usually on Form S-1. The core of that filing is the prospectus, which describes the business and the terms of the deal. SEC staff review the disclosure, but the SEC says a registration being declared effective is no approval of the IPO's merits and no confirmation that the disclosure is complete.
From then on, the company files quarterly and annual reports like any other listed company, and a trading record starts to build.
IPO underwriting and the offer price
Investment banks act as underwriters. Before the deal prices, they gather indications of interest from prospective investors and recommend a price to the company, which has the final say.
Underwriters are paid a percentage of the money raised. According to Jay Ritter's data at the University of Florida, 93.3% of bookbuilt US IPOs raising between $30 million and $160 million (in 2025 dollars) from 2001 to 2025 paid a gross spread of exactly 7%.
The price itself comes out of a tug of war. The company wants as much capital as it can get, so it pushes for a higher price. The underwriters have to place every share with their own clients, which is easier at a slight discount. The SEC calls the outcome a negotiated estimate of value, and warns that shares can trade well above or well below it soon after listing.
Who gets an IPO allocation
Underwriters decide who receives shares at the offer price. The SEC notes that most of them often go to institutional and high net worth clients, such as mutual funds, hedge funds, pension funds and insurers. Clients with a history of "flipping", meaning selling IPO shares straight into the open market, may be left out of future allocations. For an individual investor, a direct allocation in a popular deal is uncommon.
How to invest in an IPO from the UAE
An investor can come in at the offer price or after trading starts, and the chances of getting shares differ a great deal between the two.
Buying at the offer price
This route needs an account with a firm involved in distributing the offering, and that firm has to make IPO shares available to clients in the investor's country. From the UAE the options are narrow. Access depends on the provider and on which of its entities holds the account, and some large international brokers generally don't offer participation in US IPOs at all. When a deal is heavily oversubscribed, requests may be only partly filled.
Offers to sell shares in a company "before it goes public" deserve extra scrutiny, particularly unsolicited ones. The SEC's investor alert on pre-IPO investment scams covers this kind of approach.
Buying once the shares start trading
The SEC describes this as the more common route for individual investors. It means placing an ordinary order with a broker once the shares are trading in the public market. The price is whatever buyers and sellers settle on, which for a popular deal can be well above the offer price.
Regular US trading runs from 9:30 am to 4:00 pm New York time. In the UAE, that is 5:30 pm to midnight while US daylight saving time applies, and 6:30 pm to 1:00 am from 1 November 2026 to 14 March 2027. On listing day, the new stock may not open until well after the bell. On Nasdaq, the lead underwriter decides with the exchange when trading opens, and that pre-launch period has no fixed maximum. Some investors place limit orders on day one to cap the price they pay, since the price can jump within minutes of the open.
US IPO 2026 activity so far
First-quarter activity was thin. Renaissance Capital recorded 35 IPOs raising $9.9 billion, as a tech sell-off and renewed tariff turmoil weighed on markets. In the second quarter, SpaceX listed at a $1.7 trillion market value and rose 19% on its first day of trading.
Early trading has been choppy even for the most closely watched deals. Chipmaker Cerebras priced its shares at $185 after an upsized $5.6 billion raise. The stock jumped 68% on its first day of trading and lost 10% the day after. By mid-September, Renaissance Capital's count stood at 109 US IPOs for the year, 19 of them in June.
More companies filed in September. Smart ring maker Oura filed for an IPO estimated at $2.5 billion, and data centre developer Nscale filed as well, while Holtec Nuclear postponed its listing. OpenAI is reported to be aiming for a listing by 2027 or earlier. Willy Lee of Neostellar Capital told U.S. News that much of this year's activity has come from a relatively small number of very large offerings. A record total for the year doesn't mean demand has been strong across every listing.
IPO first-day pop and longer-term returns
The first-day pop is the move from the offer price to the closing price on the first day of trading. Ritter has tracked it for US operating companies since 1980.
Year | Number of IPOs | Average first-day return | Share of IPOs closing below the offer price on day one |
2023 | 54 | 11.9% | 53.7% |
2024 | 73 | 15.3% | 34.7% |
2025 | 90 | 29.3% | 24.4% |
1980–2025 | 9,345 | 19.0% | 16.5% |
Source: Jay R. Ritter, University of Florida, Initial Public Offerings: Updated Statistics. Excludes IPOs priced below $5, SPACs, ADRs, unit offers, REITs, closed-end funds and several other categories. Ritter uses a narrower definition of an IPO than most data providers, so his counts are lower than figures reported elsewhere.
In 2023, more than half of US IPOs closed their first day below the offer price, so the average hides a lot. The gain also goes to whoever bought at the offer. Anyone buying on the exchange after the open pays the market price, which may already reflect most of the first-day move.
Holding on has been less rewarding than the day-one figures suggest. Ritter looked at 1,645 US IPOs from 2012 to 2024, bought at the first closing price and held for up to three years (or until delisting or the end of 2025). The average buy-and-hold return was 7.6%, which trailed the Morningstar US Total Market Index by 25.5 percentage points over the same periods. Past performance is not a reliable indicator of future results, and an average across hundreds of companies says little about how any one listing will do.
What to read in the IPO prospectus
A newly public company has little or no reporting history, so the prospectus is often the most detailed information available. After pricing, the final prospectus with the offer price is usually filed on the SEC's EDGAR database as a 424B3 or 424B4. The SEC singles out several sections.
The risk factors section is management's own list of what could hurt the business or the shares. Every prospectus has a long one, and the entries specific to the company tend to tell a reader more than the standard wording found in most filings.
The use of proceeds section explains how the company plans to spend the money it raises. It reads well next to the principal and selling shareholders section. When existing shareholders sell shares in the IPO, that money goes to them, and the cover page shows how many shares they are selling.
The dilution section compares the IPO price with two figures: the book value of the shares, and the average price that founders, officers and early investors paid. Shares eligible for future sale shows how many shares can't be sold yet but will become tradable later.
Dual-class structures give founders shares with extra votes. They are disclosed on the first page and in the description of capital stock, and the SEC notes they can leave public shareholders with little influence over the company.
Companies with less than $1.235 billion in revenue generally count as emerging growth companies. For up to five years after listing, they can follow lighter disclosure rules, including reduced reporting on executive pay.
The IPO lock-up period and what happens at expiry
Founders, employees and early investors usually agree not to sell their shares for a period after the IPO. Investor.gov says most lock-ups last 180 days. Some also cap how many shares can be sold over a given stretch, and the terms have to be disclosed in the registration documents, including the prospectus.
Until the lock-up ends, the tradable shares are mostly the ones sold in the IPO. The SEC notes that this thin supply can push a popular listing's price steeply higher in its first days. At expiry, a large number of shares can become sellable at once, and the price may drop significantly. The SEC also observes that early investors often see an IPO as their chance to realise a profit. For anyone holding or considering a recent listing, the expiry date is useful to have on the calendar.
Risk of IPO investing for UAE residents
A short record to judge the company on
Emerging growth companies and smaller reporting companies only need two years of audited financial statements in their IPO prospectuses, compared with three for other companies. The market works out a price with little history to go on, and early trading can swing hard either way.
When price support ends
In the first few days, underwriters can support the share price, including by buying shares, to keep it from falling too far below the offer. The SEC warns that once that support stops, the price may fall significantly below the offer.
One new stock in a small portfolio
A single new listing can quickly become a large share of a small portfolio, especially if its price moves sharply after the IPO. Some investors keep any position in a new listing small relative to the rest of a diversified portfolio. That can reduce how much a weak run after listing affects the whole.
Tax points for UAE residents
The UAE does not levy personal income tax or capital gains tax on individuals. US persons, however, remain subject to US tax on their worldwide income, and some investors have tax obligations in their home country.
US estate tax is easy to overlook. For people who are neither US citizens nor domiciled in the US, US estate tax can apply to US-situs assets, including US stocks, above $60,000. It is charged on a graduated scale that reaches 40%. Estate tax treaties between the US and some countries can change this, depending on the investor's nationality and domicile. Investors building sizeable US holdings may want to take tax advice on their own situation.
What to check in a DFSA-regulated brokerage or other provider
Authorisation is one place to start. A DIFC firm should appear on the DFSA's public register. Firms elsewhere may be authorised by the FSRA in ADGM, by the SCA onshore, or by an established regulator abroad, and all of these are legitimate regimes. The thing to confirm is that the firm holds authorisation for the specific activity it offers, such as dealing in or arranging investments.
Custody is another point: who holds the shares, and whether client assets are kept apart from the firm's own money. For accounts held with a US broker-dealer, SIPC protection applies to eligible assets if the broker fails. The limit is $500,000 per customer, including a $250,000 limit for cash. No scheme covers losses from market movements.
For new listings, investors may also want to look at how soon a stock becomes available to trade after its IPO, and whether fractional shares are offered when the share price is high.
Other ways to get exposure to new US listings
Some ETFs track baskets of recently listed US companies, which spreads money across many new listings at once. Large companies can also enter broad market indices once they meet each index provider's eligibility rules. Broad index funds may therefore pick up exposure to major listings over time without anyone choosing them individually. Fees and holdings vary from fund to fund, and each fund's fact sheet and prospectus set them out.
Investing in newly listed US stocks with CUSP Wealth
CUSP Wealth's platform gives access to more than 10,000 US-listed stocks and ETFs, subject to eligibility and product availability. These include over 1,300 options screened as Shariah-compliant under CUSP's screening methodology. When a newly listed company becomes available on the platform, it can be bought like any other US stock. Where fractional trading is available for that stock, an investor can buy part of a share when the share price is high. Investors looking for Shariah-compliant holdings can check whether a new listing has been screened under the platform's Shariah filters.
Client assets are held separately with Alpaca, a regulated US custodian. Eligible assets carry SIPC protection of up to $500,000, including up to $250,000 for cash. Investors choose and manage their own holdings, and CUSP Wealth provides human advisory services. Clients who meet CUSP Wealth's suitability assessment can book an advisory call to discuss their goals and overall portfolio.
This SIPC protection applies in the event of broker failure and does not protect against investment losses. CUSP Wealth's services are available to DFSA-classified DIFC retail clients and are not offered outside the DIFC. Cusp Wealth Ltd is regulated by the DFSA.
FAQ about investing in US IPOs from the UAE
Can UAE residents invest in US IPOs?
How do you invest in an IPO at the offer price?
Is a first-day pop guaranteed?
How long is an IPO lock-up period?
Which US IPOs are expected in the rest of 2026?
Do UAE residents pay tax on gains from US IPO stocks?
Disclaimer: This article is published for educational and informational purposes only. It does not constitute financial, investment, tax, or legal advice, nor is it a recommendation or endorsement of any specific financial product, fund, or service. The value of investments can go down as well as up, and you may lose all or part of your capital. Past performance is not indicative of future results. Readers should conduct their own research and consult a qualified financial adviser before making any investment decisions.
Any opinions, market commentary, research, analysis, prices, statistics, projections, or other information referred to in this article are based on information available at the time of publication. Cusp Wealth Ltd takes reasonable care to ensure that the information is accurate and obtained from sources believed to be reliable, but no representation or warranty is made as to its accuracy, completeness, reliability, or continued applicability. Any third-party information used in this article is provided for informational purposes only. Cusp Wealth Ltd shall not be liable for any losses arising directly or indirectly from reliance on, or misuse of, the information contained in this article.
Cusp Wealth Ltd is regulated by the Dubai Financial Services Authority (DFSA) and is incorporated in the Dubai International Financial Centre (DIFC). The firm holds a Category 4 licence (licence number 10863, reference number F011420) and is authorised to provide financial services to both Professional and Retail Clients, including Shariah-compliant offerings, in accordance with its DFSA licence and Islamic Endorsement.
The information in this article is current as of September 2026 and is subject to change.
