5 ms·
How could they not pop if people can't sell?
by timwaagh 5y ago
How could they not pop if people can't sell?
- dougSF70 5y agoA bank is given an allocation to sell at IPO, the IPO roadshow before the IPO is where potential investors have the chance to buy an IPO allocation at the IPO price. This price can move up and down to manage/stimulate demand. On the IPO day, these shares are allocated to investors. They can then hold them or sell part or all of their allocation. Those investors who did not get allocated shares can then buy them on the market causing them to pop.
- timwaagh 5y agoI'm wondering whether these things ever go down at market open. If not then that's a free lunch.
- dnautics 5y agoYes they sometimes go down. Up, or down, there are always sales at hand in price movements. And, everyone has a price. The common upward bump is partially because, why would you IPO if you didn't think there was long value? But also (I think) because in the first few days there isn't that much interest (volume of shares that are 1. tradeable and 2. which people want to let go of ~ IPO price), so the supply is constrained and the supply/demand value dynamic is biased up.