Stock issued in an IPO usually trades significantly higher at the end of the first day of trading than the original IPO price.

Question

Quizplus · Accepted Answer

This is often referred to as the "pop" or the "first-day return" and is a common phenomenon in the stock market. It occurs because there is typically more demand for shares than there are available shares in the IPO, leading to a higher price at which buyers are willing to purchase the stock. However, it's important to note that this initial price increase is not always sustained in the long term and that investing in IPOs can be risky.

Stock Issued in an IPO Usually Trades Significantly Higher at the End