Break Issue

Filed Under: ,
Dictionary Says

Definition of 'Break Issue'


A type of stock initial public offering (IPO) that trades below the original offering price to the market within the first few months after trading begins. A break issue can be the result of poor market conditions as a whole, industry concerns or lack of demand in the new issue itself.

Investopedia Says

Investopedia explains 'Break Issue'


If several IPOs drop below their original offering price in a short period of time, private companies looking to go public (and the underwriters looking to take them there) may delay their security filings, as investor demand would be deemed low. Any one IPO will rise or fall on its own merits, but a trend of poor performance may signal that the timing just isn't right to make a company public. Break issues also can be the result of a venture-capital firm hoping to quickly cash-out of one or more of their portfolio investments before the company is mature enough to be a public issue.

comments powered by Disqus
Hot Definitions
  1. Private Equity

    Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity.
  2. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  3. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  4. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  5. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  6. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
Trading Center