IPOs are particularly attractive to companies during stock market declines because investors can buy the shares of stock for a low price, and this makes it more likely that the company will be able to sell a lot of shares.

Question

Quizplus · Accepted Answer

IPOs are generally more attractive during strong or rising stock markets because investor confidence and willingness to invest in new issues are higher, potentially leading to a better valuation and successful sale of shares. During market declines, investor confidence is lower, making it more challenging for companies to raise capital through IPOs.

IPOs Are Particularly Attractive to Companies During Stock Market Declines