Trademarks differ in breadth and can cover a wide range of categories of goods and services. We draw on real options theory and argue that greater trademark breadth constitutes a valuable real option that is associated with higher firm valuation and performance. We analyze a sample of 1510 firms that went public in Europe between 2002 and 2015 and find a positive effect of trademark breadth on initial public offering (IPO) valuation and post-IPO performance. We implement a contingency analysis to contrast real options and signaling theory and find stronger support for the real options perspective. •We draw on real options theory to explore the impact of trademark breadth on IPO outcomes•Empirical study of 1,510 European IPOs between 2002 and 2015•Trademark breadth is associated with higher IPO valuation and post-IPO performance•We implement a contingency analysis to contrast real options and signaling theory•We perform a wide range of robustness checks and employ instrumental variables