Definition of Hot issue:
A hot issue is a highly coveted initial public offering (IPO). Prior to the offering, the company has built up hype, whether or not deserved, and has decided to bring its shares to the public. With only a limited amount of stock available, and many investors wanting a piece of the action, the IPO garners much attention and further stokes the fires of investor demand.
An Initial Public Offering (IPO) in which demand exceeds supply. They are typically from high-profile companies.
A company that has developed a new and exciting technology, a biotechnology firm with a promising drug in a late-stage trial, a "sharing economy" company that is quickly penetrating markets—these can capture the imagination of public investors who await a potential IPO. The gestation period of a company prior to going public can be short or long, depending on preferences of the founders to yield some control and early investors, including these founders, to experience their liquidity event.
How to use Hot issue in a sentence?
- When only a limited number of shares are available, and the stock sees large gains after its IPO, the buzz can further stoke the fires of investor demand.
- Biotechnology companies with promising drugs or high tech companies with innovative products are often hot issues.
- A hot issue is a highly sought after initial public offering.
- Some investors only participate in hot issues for quick short-term gains, while others are in it for the long term.
Meaning of Hot issue & Hot issue Definition