Perspectives · New issues · 2026

How an IPO is priced, and why day one is not the whole story

In a conventional IPO the company and its banks set an offer price after sounding out investors. Shares are allocated at that price to those who put in orders, and then begin trading. The first-day close is set by the market.

Many offerings rise on day one, sometimes by a great deal, as Snowflake, Arm and Figma did. Some priced below their range or opened lower, as CoreWeave and Uber did. The gain on the first day goes mainly to those who received shares at the offer price. Those who buy later pay the market price, which can be higher or lower than the offer price in the months afterwards, especially when early holders become free to sell at the end of a lock-up.

A listing is a pricing event, not a verdict. The long-run result depends on the company, the price paid and the time held.

General information only; not investment advice. Read the risk warning.