Security

The market for initial public offerings and new-issue markets can be extremely volatile. During the dot-com period in the late 1990s, there was a high demand for securities. However, there have also been periods when new companies struggled to raise money. The price changes of new issues can be dramatic when the market is hot. It is important for holders of an IPO whose stock price rises dramatically to consider if this performance can be sustained. Investing in emerging firms through the new issue market offers exciting opportunities but also carries risks.