Why is IPO considered high risk?

IPOs often debut in a volatile market, making their initial performance unpredictable.

Newly listed companies lack extensive financial history, making it challenging to assess their stability.

Due to high demand and media attention, IPOs can be overhyped, leading to potential overvaluation.

Insiders may sell their shares after the lock-up period expires, affecting stock prices.

The underwriting process may not accurately reflect the company's actual value.

Some IPOs involve companies with inexperienced management teams.

Investors may miss out on regular dividends as new companies often reinvest earnings for growth.