Purchasing a firm's stock in an IPO can be risky because financial information may not be fully disclosed.

Question

Quizplus · Accepted Answer

When a firm goes public, it is required to provide certain financial information to potential investors, but there may still be important details that are not fully disclosed or not yet known. As a result, purchasing the stock in an IPO may carry greater risk than buying shares in a publicly traded company with a longer financial history and more information available.

Purchasing a Firm's Stock in an IPO Can Be Risky