'Recent debuts ... have ultimately turned out flat'

A number of other hot tech stocks went public back then, too, without great results, as CNBC reported at the time: "Recent debuts from tech outfits such as Pandora Media and Groupon have ultimately turned out flat. Indeed, some professionals are warning mom and pop investors away from such offerings." In fact, more than 60% of the 7,000-plus IPOs from 1975 to 2011 had "negative absolute returns five years following their first day of trading, and only a handful produced extreme positive returns, according to a UBS analysis using data from University of Florida professor Jay Ritter," CNBC reported.

How long you should wait before investing

These dips in stock prices are standard for companies making their debuts, Eric Walters, a Colorado-based certified financial planner, tells CNBC Make It. Still, the data highlights why everyday investors should probably wait 12-18 months before buying stock from a company fresh off an IPO. Walters says there are a few reasons for this: Prices tend to fluctuate significantly as corporate insiders and venture capitalists sell their shares.

The company will be working out how to operate as a publicly traded company.

The people underwriting a company's IPO aren't necessarily interested in creating long-term value for an IPO investor; they're often interested in increasing short-term profits. "They want to increase excitement for a stock to maximize the gain on the actual IPO," says Walters.

The average investor should tread carefully around an IPO. Arielle O'Shea investing and retirement specialist, NerdWallet

Additionally, Walters says, investors should wait to see if management shifts, which is common after an IPO and can influence stock price. Waiting a year to a year and a half to buy allows these pressures to die down. Plus, you can get a sense of how the company will actually operate in the long term. Be wary of investing in a big name just because you read about it in the news, experts add. You don't want to invest in something just because of the media hype. "There's such a flurry of activity right now," says O'Shea. "It can be exciting and it's easy to get ahead of yourself as an investor, especially with some of these names. But the recognition of a company is pretty far down on the list of things to consider before investing in a stock."

Assess your financial situation

The majority of investors should not prioritize putting money into individual stocks, O'Shea says. For most people, the best way to invest is in low-cost ETFs or index funds. That's the approach Warren Buffett has advocated for retail investors. Before diving into individual investments, you should survey your entire financial situation. Here are a few questions to ask yourself: Do you have an emergency fund with several months' worth of expenses saved?

Are you contributing to a retirement account?

How much debt do you have?

You want to have these aspects of your financial life in order first, before thinking about making an individual investment. Consider, too, your long-term investment plan. How does investing in Pinterest or Zoom (or Lyft or Uber) fit in? You might that find after considering your overall financial health, that it doesn't make sense to invest in trendy companies right now. For example, if your goals are to pay for your kid's college tuition and retire in 30 years, you need to ask yourself how buying individual stock helps you get there. And if you do decide to invest in individual stocks, they should comprise no more than 5% to 10% of your total portfolio, O'Shea says.

How to buy stock