One argument that explains why IPOs are underpriced, on average, is that underwriters underprice issues to avoid being sued by angry customers. Why, then, shouldn't you indiscriminately buy shares of stock in every IPO that comes out?

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The Answer of One argument that explains why IPOs are underpriced, on average, is that underwriters underprice issues to avoid being sued by angry customers. Why, then, shouldn't you indiscriminately buy shares of stock in every IPO that comes out?

One Argument That Explains Why IPOs Are Underpriced, on Average