Question Details

	Username: ForexGuy Rating: Asked to: Tom Burke Date Created: 20 Dec 2017
Category	28
Tag	Financial
Question	What does 'Underpricing' mean?

Advice from Guru

Hello ForexGuy,

Underpricing is the pricing of an initial public offering (IPO) below its market value. When the offer price is lower than the price of the first trade, the stock is considered to be underpriced. A stock is usually only underpriced temporarily because the laws of supply and demand will eventually drive it toward its intrinsic value.

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