Quote:
Originally Posted by Chris
You need to wait at least 3 months before you get the beginning of a meaningful answer to that.
|
Didn't the Government give up most of it's share in the initial offering?
EDIT: No, turns out they didn't. So hopefully the price isn't a fluke and is the worth of the business.
---------- Post added at 23:45 ---------- Previous post was at 23:41 ----------
Quote:
Originally Posted by nomadking
The inital price will have been based on worth of business. After that the share price will be affected by people treating the shares as a easy way of making money and not a longer term investment. X will buy shares based on what the buyer Y thinks buyer Z will pay for them. This increase the share price. Same thing happens with house prices. People buy a house expecting to make an easy profit in a years time from somebody else who will in turn hope to make an easy profit in another years time.
|
The share price reflects what the market thinks the company is worth.
When you're doing an IPO you don't want to price it too high so that the offering is undersubscribed but you also don't want to leave money on the table. The share price changing too much from it's initial pricing is not what you want, at least not if you're the one selling those shares.