This study investigates the three puzzles with regards to a two-stage IPO strategy in the U.S., namely, underpricing, IPO timing, and long-term performance. Firstly, we find that a two-stage IPO strategy may be suitable for firms who expect to raise public equities, but are highly cost-sensitive. In such an IPO strategy, firms can significantly reduce IPO cost. The public status before IPO might cost extra due to filing cost, etc... We can consider it as the price of an option; an option to conduct IPO with lower cost. Secondly, we find two-stage firms are similar to the conventional IPO firms. They have similar long-term stock market performance, operating performance, use similar level of earnings management and have similar amount of frauds. Thirdly, through the investigation on two-stage firm’s earnings management, we find that higher earnings management relative to domestic firms, can increase IPO valuation and doesn’t affect after market performance. But higher earnings management relative to the firms in the listing country does not increase IPO valuation. Even worse, it reduces after market performance. Lastly, we find the two-stage firms with longer time interval between public listing and IPO are likely to have low IPO cost and low earnings management. The two-stage firms with CEO-chairman duality are likely to commit frauds and have long-term underperformance.