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When stock gains on the first day of trading?

When stock gains on the first day of trading?

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Answer #1

The stock gains on first day of trading when the market feels that the IPO price is less than the value the stock should possess. It can be because of higher expectations of the market or it can also be just a hype by the market participants because sometimes it has been seen that after the first day of trading at higher prices, some stocks go below the IPO prices later. But, it can also be due to the market actually believing that the intrinsic stock price should be more than the IPO price.

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