It is worthwhile to investigate abnormal performance of IPOs by incorporating investor sentiment. Using the method of Agent-based Computational Finance (ACF), we analyze the effect from different kinds of investor sentiment on IPOs first-day underpricing and long-term performance. The results show that individual investor’s sentiment is positively correlated with the IPO’s first-day underpricing and its long-run performance. In the long run, along with the rising of individual investor sentiment, IPOs’ long-term performance will change from underperforming to outperforming. This conclusion provides a more reasonable explanation for the different IPOs long-term performance.