What does the pop price mean?
Investors and analysts sometimes use the POP price as a benchmark against which a stock's current price can be compared. If a company's share price rises significantly above its initial public offering price, the company is considered to be performing well. However, if the share price later dips below its initial public offering price, ...
Why do underwriters need to set a POP?
Underwriters need to set a POP that is low enough to attract the attention of investors, yet high enough to ensure the company raises a satisfactory amount of money through the new stock issue. Some qualitative factors—such as the public's perception of a company or the desire to invest in the next hot tech company—can sometimes push ...
Why do underwriters determine the price of an IPO?
Because the goal of an initial public offering (IPO) is to raise money, underwriters must determine a public offering price that will be attractive to investors. When underwriters determine the public offering price, they look at factors such as the strength of the company's financial statements, how profitable it is, public trends, growth rates, ...
What does it mean when a stock price dips below its initial price?
However, if the share price later dips below its initial public offering price, this is considered a sign that investors have lost confidence in the company's ability to create value. A public offering price does not necessarily reflect what the shares are worth.
What factors should an underwriter look for when setting the public offering price?
Underwriters look at a variety of factors when setting the public offering price, such as the profitability of the company, the strength of its financial statements, growth trends, and investor confidence. Underwriters need to set a POP that is low enough to attract the attention of investors, yet high enough to ensure the company raises ...