What is a Hot IPO?
A hot IPO is an IPO for which there is great demand.
How Does a Hot IPO Work?
For example, let's say Company XYZ invents a cure for cancer and patents the invention. The company can change the world and make its owners fabulously , so investors are drooling over the company's upcoming $900 million . They are calling every trying to get their hands on some . This is a hot IPO.
Why Does a Hot IPO Matter?
Hot IPOs get aof anticipatory press, a lot of interest from investors, and a lot of media coverage. They also tend to 'explode' on their first day of trading and can influence the rest of the .
It is important to, however, that plenty of hot IPOs have become poorly performing .