Shares/Stock IPO Can Be Scam

[Jasmine]

For a lot of people, IPO is a great opportunity to get into stock market because you can buy stocks for relatively cheaper price which can go substantially up once the IPO closes and the stocks begin to trade regularly on the stock market. Buying IPO can be good for short term investors as well as long term investor. However, not many people realize that IPO can also be a scam.

Sometimes when a company releases IPO they overvalue their price. The price of the company’s share is higher than the actual price. When people pay more for the stock that’s its true value it is definitely a scam.

Sometimes IPO is launched by companies that do not have any good performance in the real market and their performance exist only on papers. They trick or bribe the security board to get listed for IPO.

Once these companies begin to trade in the real market, the stock price will go down and you will lose money.

 

[niche]

Yes, many investors have purchased shares at very high prices during the IPO due to the hype in the media, and the price have reduced greatly later causing losses for the investors

 

[Suba]

@Jasmine reading your thread, I want to discuss IPO, you need to know that companies must meet certain requirements before issuing an IPO including having a clear organizational structure, Financial statements have been audited by a public accountant, while determining the initial price of the IPO is mainly based on an agreement between the company and the underwriter. also through calculations with methods such as Price Earning Ratio, will also be influenced by early investors. Why did IPO shares initially skyrocket and then drop drastically? At the beginning of the high demand IPO period, this is when early investors took profit selling their shares. so the price dropped drastically. but if the company's condition is normal, the IPO price will be bullish after 3-6 months.

 

[Mika]

IPO shares are released by a company after it gets approval from the security exchange board to go public. IPO is a way to build funds for companies by releasing shares for public investment, thus the public can start investing in the stocks with small funds. Even though companies have to follow certain procedures before getting approval to release IPO, some companies always find loopholes. Despite poorly performing in the market, they manage to give their company a better ranking on papers. They forge papers to deceive the security board as well as common investors. When people buy these IPO, the price will drop and the public will lose money. In order to get avoid being scammed, you need to check the company's actual performance in the market. Sometimes whales also hoard a lot of IPO shares and once the IPO closes, they start selling for a high price. This is another scam