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Line 1: {{Multiple issues\| ~~{{multiple issues\|cleanup=April 2011\|essay-like=April 2011\|original research=April 2011}}~~ {{original research\|date=April 2011}} {{essay-like\|date=April 2011}} {{cleanup\|date=April 2011}} }} '''[[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 algorithm: Difference between revisions