Public Offering Price - POP


DEFINITION of 'Public Offering Price - POP'

The price at which new issues of stock are offered to the public by an underwriter. Because the goal of an IPO is to raise money, underwriters must determine a public offering price that will be alluring 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 and even investor confidence.

BREAKING DOWN 'Public Offering Price - POP'

Investors and analysts sometimes use the initial public offering 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, this is considered a sign that investors have lost confidence in the company's ability to create value.

  1. Price Band

    A value-setting method in which a seller indicates an upper and ...
  2. Final Prospectus

    1. The final version of a prospectus for a public offering of ...
  3. Underwriting

    1. The process by which investment bankers raise investment capital ...
  4. Primary Market

    A market that issues new securities on an exchange. Companies, ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  6. Oversubscribed

    A situation in which the demand for an initial public offering ...
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  2. Can mutual funds invest in IPOs?

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  3. How does investment banking differ from commercial banking?

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  4. What kind of assets can be traded on a secondary market?

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  6. Why would a company decide to utilize H-shares over A-shares in its IPO?

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