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'''[[Initial_public_offering#Pricing|IPO underpricing]]''', is the increase in stock value from the initial offering price to the first-day closing price. Many believe that underpriced IPOs leave money on the table for corporations, but some believe that underpricing is inevitable. Investors state that underpricing signals high interest to the market which increases the demand. On the other hand, overpriced stocks will drop long-term as the price stabilizes so underpricing may keep the issuers safe from investor litigation.
==IPO Underpricing Algorithms==
[[Underwriters]] & [[investors]] and corporations going for an [[Initial Public Offering]] (IPO), issuers, are interested in their market value. There is always tension that results since the underwriters want to keep the price low while the companies want a high IPO price.
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