Pre-IPO placements occur when IPO underwriters make stocks available at a discount to selected investors before an IPO . These typically happen immediately before the IPO. Stock options are sometimes provided to employees, who may resell their shares, subject to restrictions.
Read moreIs it good to buy shares in IPO?
It is wise for investors to take enough precautions while investing in IPOs as at times such investment could be riskier than perceived. If the business looks too risky as per the advice of market participants and does not match well with your risk-taking ability, it is better to avoid investing in IPOs .
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