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Initial Public Offerings (IPOs) represent critical events in the life cycle of companies, often characterized by a phenomenon of underpricing. IPO underpricing is a situation in which the initial public offering (IPO) price of a company's shares is set lower than their actual market value on the first day of trading. This study comprises 118 IPOs from the UK and 108 from Sweden totaling up to 226 IPOs in total with a period from 2015 to 2019. This study utilized quantitative Methodology to address its research inquiry (How does the underpricing of new IPOs affect the long-term performance of the stock?). To examine this question, Ordinary Least Squares (OLS) regression analysis was employed to evaluate the relationship between underpricing and the subsequent long-term performance of IPOs. The outcome of the regression stated that there was a relationship between long-term performance and underpriced IPOs in the UK market. Nevertheless, the Swedish underpriced IPOs had no relationship with the long-term performance. Investors in Sweden or might consider investing into Swedish IPOs might be better off to buy and sell for short- term to gain an arbitrage opportunity. However, for the UK market, the best recommendation based on the regression analysis indicates that the investor could benefit by purchasing IPOs and to hold on to the stock for the long-term.