An initial public offering that appeals to many investors and for which there is great demand. Hot IPOs are often oversubscribed - meaning market demand far exceeds the supply of shares - which results in the stock price surging as soon as it is offered on the market.
Investopedia Says:
The late 1990s saw one of the hottest IPO markets ever. There was so much demand for internet stocks that nearly all of them were oversubscribed, leading to substantial gains during the first days of trading. For example, Priceline.com saw its stock rocket 325% in a single day from an IPO price of $16 to $68/share. Because hot IPOs are in high demand, underwriters usually offer those shares to their most valued clients.
Related Links:
What's an IPO, and how did everybody get so rich off them during the dotcom boom? We give you the scoop. IPO Basics Tutorial
Thinking of investing here? We give you five tips to remember. The Murky Waters Of The IPO Market
Learn to decipher the secret language of the prospectus - it can tell you a lot about a company's future. Don't Forget To Read The Prospectus!
