Managers of companies going public may try to hide bad news and make their earnings look better to keep their stock prices up. A study found that it's harder to understand the paperwork of these companies when they first go public, and this can lead to them manipulating their earnings. If the biggest shareholders can be replaced easily, this can make the managers less likely to play these games. So, if you're thinking about investing in a new company going public, pay attention to what the managers are saying to make sure you're making a smart choice.