On the first day that a stock begins trading in the public markets, the security may experience the best percentage gains that the issuing company ever sees. The markets and investors get excited about new money entering the
IPO performance can be measured in individual companies or in a series of companies that issue
Media hype can affect IPO performance. Market psychology plays into investor behavior, and if financial commentators and authors are not confident about a new stock, the sentiment can very easily spill over to the markets. If the media anticipate an IPO with positive comments, demand in the new issue could surge, and this will affect IPO performance to the upside.
Sometimes, an overseas company will begin trading its shares on another country's stock market, a security known as an American
The size of a new issue can affect IPO performance too. If there is a particularly large new issue that is planning to trade in the public markets, the stock will likely get a lot of attention from the media and financial analysts alike. Offering size could create increased demand for the issue because investors see the confidence that company executives and investment bankers involved in the IPO have on the deal.