Underwriters tend to offer shares in an IPO at a price that is below that which the market will pay to reduce their exposure to losses from unsold shares.

Name: Underwriters tend to offer shares in an IPO at a price that is below that which the market will pay to reduce their exposure to losses from unsold shares.
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Underwriters typically set the IPO price below the market price to ensure that the shares sell and to reduce their risk of being left with unsold shares. This is known as underpricing.

Underwriters Tend to Offer Shares in an IPO at a Price