InvestSLR Archives

Sep

2025

What Are Stock Delistings and Why Do They Occur?

By Rebecca Lake | Financial Independence, Growing Wealth, invest, Investing | Comments Off

Table of Contents

How Stock Listings Work
What Does Delisting a Stock Mean?
What Happens If a Stock Is Delisted?
What to Do If a Stock You Own Is Delisted
FAQ

When a stock is delisted, that means it’s been removed from a public stock exchange. All publicly traded stocks are listed on an exchange. In the U.S., that typically means the New York Stock Exchange (NYSE) or the Nasdaq.

There are different reasons for delisting stock, it can occur voluntarily, such as when a company chooses to go private, or involuntarily, if it fails to meet the requirements of the stock exchange.

Owning a delisted stock doesn’t mean you can no longer trade it, but it does change how trades take place. If you own a delisted stock, it’s important to understand what it may mean for your portfolio.

Key Points

• Stocks can be removed from major exchanges through delisting, either voluntarily or involuntarily.

• Common reasons for delisting include failing to meet listing requirements, going private, or financial distress.

• Delisting impacts investors by making shares harder to trade and potentially losing value.

• After delisting, stocks move to over-the-counter (OTC) markets, reducing transparency and accessibility.

• Investors should assess the reason for delisting and may choose to sell shares if it signals financial issues.

How Stock Listings Work

Before diving into stock delisting, it’s helpful to know more about how stocks get listed in the first place. Stock exchanges can either be physical or digital locations in which investors buy and sell stocks and other securities. The NYSE is an example of a physical exchange, while the Nasdaq is an electronic stock exchange.

To get listed on any stock exchange, companies must meet certain requirements. For example, Nasdaq-listed companies must meet specific listing guidelines relating to:

• Pre-tax earnings

• Cash flows

• Market capitalization

• Revenue

• Total assets

• Stockholder equity

• Minimum bid price

Companies must also pay a fee to be listed on the exchange. The NYSE has its own requirements that companies must meet to be listed.

Once a stock is listed, it can be traded by investors. But being listed on an exchange doesn’t guarantee the stock will remain there permanently. Stocks get added to and removed from exchanges fairly regularly.

What Does Delisting a Stock Mean?

When a stock is delisted, either the company itself or the exchange decides to remove the stock from the exchange.

Exchange-Initiated Stock Delisting

When an exchange delists a stock, it’s typically because it no longer meets the minimum requirements for listing or the stock has failed to meet some regulatory requirement. Using Nasdaq-listed stocks as an example, a delisting can happen if a company’s pre-tax earnings, market capitalization, or minimum share price fall below the thresholds required by the exchange.

Exchanges set listing requirements to try and ensure that only high-quality companies are available to trade. Without stock listing requirements, it would be easier for financially unstable companies to find their way into the market. This could pose an investment risk to individual investors and the market as a whole.

In delisting stocks that don’t meet the basic requirements, exchanges can minimize that risk. When and if a company addresses the areas where it falls short, it can apply for relisting. Assuming it meets all the necessary requirements, it can once again trade on the exchange.

Exchanges typically give companies opportunities to rectify the situation before delisting stocks. For example, if a company is trading under the minimum bid price requirement, the exchange can send notice that this requirement isn’t being met and specify a deadline for improvement. That can help companies that experience temporary price dips only to have share prices rebound relatively quickly.

Company-Initiated Stock Delistings

A delisted stock can also reflect a decision on the part of the listed company. There are different reasons a company voluntarily delists itself. Scenarios include:

• A move from public to private ownership

• Merger with or acquisition by another company

• Bankruptcy filing

• Ceased operations

In some cases, a company may ask to be delisted as a preemptive measure if it’s aware that it’s in danger of being delisted by the exchange. For example, if the latest quarterly earnings report shows a steep decline in market capitalization below the minimum threshold, the company may move ahead with voluntary delisting.

What Happens If a Stock Is Delisted?

Once a stock has been delisted from its exchange, either voluntarily or involuntarily, it can still be traded. But trading activity now happens over-the-counter (OTC) versus through an exchange.

An over-the-counter trade is any trade that doesn’t take place on a stock exchange. Investors can trade both listed or delisted stock shares over-the-counter through alternative trading networks of market makers. The OTC Markets Group and the Financial Industry Regulation Authority (FINRA) are two groups that manage OTC trading activity.

Unless the company that issued a now-delisted stock cancels its shares for any reason, your investment doesn’t disappear. If you owned 500 shares of ABC company before it was delisted, for example, you’d still own 500 shares afterward. You could continue trading those shares, though you’d do so through an over-the-counter network.

What can change, however, is the value of those shares after the delisting. Again, this can depend on whether the exchange or the company initiated a delisting, and the reasoning behind the decision.

For example, if a stock is being delisted because the company is filing for bankruptcy its share price could plummet. That means when it’s time to sell them, you may end up doing so at a loss.

Even if a stock’s value doesn’t take a nosedive after delisting, it can still be a sign of financial trouble at the company. If you own delisted dividend-paying stocks, for instance, dividend payments may shrink or dry up altogether if the company begins making cutbacks to preserve capital or reduce expenses.

What to Do If a Stock You Own Is Delisted

If you own shares in a company that delists its stock, it’s important to consider how to manage that in your portfolio. Specifically, that means thinking about whether you want to hold on to your shares or sell them.

It helps to look at the bigger picture of why the reason for the delisting and what it might say about the company. If the company pulled its stock because a bankruptcy filing is in the works, then selling sooner rather than later might make sense to avoid a sharp drop in value.

Also, consider the ease with which you can later sell delisted stock if you decide to keep them. Some online brokerages allow you to trade over-the-counter but not all of them do. If you prefer to keep things as simple as possible when making trades, you may prefer to unload delisted stocks so you no longer have to deal with them.

Recommended: How to Open a New Brokerage Account

The Takeaway

When a stock becomes delisted, it’s removed from a stock exchange, either because it no longer met the requirements of the exchange, or because the company chose to delist for financial reasons. You can still trade a company after it’s delisted, but transactions occur over-the counter, rather than on an exchange.

Knowing about delisted stocks and companies can be helpful for investors of all types. Broadening your knowledge about the markets is almost never a bad idea.

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FAQ

Why would a stock get delisted?

A stock can be delisted and removed from a stock exchange for a number of reasons. The delisting may be voluntary, meaning the company chooses to be delisted because it’s going private or being bought or merged with another company, or it is planning to declare bankruptcy or cease operations.

An involuntary listing, on the other hand, is when a stock exchange delists a stock because it no longer meets certain requirements by the exchange. For example, a stock could be delisted by an exchange if it no longer fulfills requirements for its share price, pre-tax earnings, or market capitalization.

Is delisting a stock good or bad?

In general, holding delisted stock is less than desirable. Once a stock is delisted from a major exchange, it becomes harder to buy and sell. In addition, the price of the shares may fall, or the delisting could be a signal that the company is in financial trouble.

What happens to my stock if a company delists?

Once a company is delisted, you still own your shares of the stock, but it becomes more difficult to buy and sell them. That’s because the stock is no longer on a major stock exchange but instead it’s on an over-the-counter (OTC) market, which is less accessible to investors and has less regulation and transparency. The value of your shares may also drop.

However, if the company delisted voluntarily because it is going private or being merged with another company, you might receive cash for your shares or shares in the purchasing company. Understanding the reason for the delisting and how it may affect your shares can be helpful.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

Photo credit: iStock/wacomka

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q325-074

Sep

2025

Understanding Low-Float Stocks

By Ashley Kilroy | Growing Wealth, invest, Investing | Comments Off

Table of Contents

Stock Float: Quick Recap
What Are Low-Float Stocks?
Understanding Shares Outstanding
Floating Stock, Example Calculation
Importance of Low-Float Stocks
Benefits of Trading Low-Float Stocks
6 Reasons for Low-Floating Shares
Evaluating Low-Float Stocks
How to Trade Low-Float Stocks
The Takeaway
FAQ

A company’s float, or floating shares, are those available for public trading after subtracting closely held stock and restricted shares from all outstanding shares. Low-float stocks are companies with a relatively small number of shares available for public trading. It doesn’t mean the company has very few shares in total.

The percentage of floating stock can help investors assess a stock’s liquidity. Float can also be an indicator of volatility.

Low-float stocks are considered more volatile, and typically have higher bid/ask spreads (a reason some day traders look to trade low-float stocks). But a company’s float can change owing to various conditions.

Key Points

• Low-float stocks are companies with a smaller percentage of outstanding share available for public trading.

• The float of a stock is calculated by subtracting closely held and restricted shares from the total number of outstanding shares, to get the percentage available for public trading.

• Various factors contribute to a company’s float, including control by insiders, family ownership, stock buybacks, and stock-based compensation.

• Day traders often favor low-float stocks due to their potential for significant short-term gains, but the high volatility also presents substantial risks that require careful evaluation.

• Monitoring news events and technical indicators is essential for trading low-float stocks, as these factors can lead to dramatic price movements and influence trading strategies.

Stock Float: Quick Recap

The float of a stock indicates the number of shares of company stock available for public trading. The measure doesn’t include closely held shares, those owned by controlling investors, employees, institutions, or company owners.

A company’s float changes frequently. Calculating floating stock requires looking at a company’s balance sheet and taking the total number of shares of a company and subtracting any restricted and closely held shares.

Some stock indexes, such as the S&P 500, use the percentage of floating stock as the basis for figuring out the free-floating market cap of a company. This is different from standard market capitalization, which simply refers to the number of outstanding shares multiplied by the share price.

Recommended: Investing 101 Guide

What Are Low-Float Stocks?

Some larger corporations have very high floats, in the billions, and investors typically consider a float of 10 to 20 million shares as a low-float. But there are companies with floats of less than one million, and you can find even lower-float stocks trading on over-the-counter exchanges (OTC).

Companies with a low-float frequently have a large portion of their equity held by controlling investors such as directors and employees, which leaves only a small percentage of the stock available for public trading. That limited supply can cause dramatic price swings if demand changes quickly.

Because low-float stocks have fewer shares available, investors interested in trading stocks like these may have difficulty finding a buyer or seller for them. This may make the stocks more volatile, which appeals to day traders. The bid-ask spread of low-float stocks tends to be higher as well.

Recommended: Stock Market Basics

Understanding Shares Outstanding

Another stock market term that helps explain low-float stocks is shares outstanding. Shares outstanding refers to the total number of shares issued by a company, including those that can’t be traded (e.g., closely held and restricted shares).

Insider shares are considered closely held, because they’re owned by company employees, officers, and managers, as well as institutional investors (and others who have a controlling stake in the company).

When those shares are subtracted from the total outstanding, that’s the amount available for public trade. This is known as the float percentage. Companies might have numerous shares outstanding, but only a certain percentage of floating stock that can be publicly traded.

The amount of floating stock typically changes over time, as companies might sell more stock to raise money, or company stakeholders might sell their holdings. If a stock goes through a stock split or reverse split, this will also increase or decrease floating shares.

Floating Stock, Example Calculation

If a trader thinking of buying stock online looks at a company’s balance sheet, they can see how many outstanding shares the company has under the heading “Capital Stock.”

Looking at fictional Company A, the company’s balance sheet shows outstanding shares and floating stock shares:

• 50 million shares outstanding

• 45 million float shares

This is a high-float stock, with 90% of the stock available for trade. By contrast, Company B has:

• 2 million shares outstanding

• 475,000 float shares

This is a 23.75% float, and could serve as a signal for day traders to look at other factors to determine whether they want to invest in the stock.

Importance of Low-Float Stocks

If you’re interested in investing in a particular company, it’s important to understand its stock float, in order to gauge potential risk factors (like volatility, liquidity, and the size of the bid-ask spread).

The size of a stock float can change over time, which would affect the stock’s liquidity and volatility. Stock buybacks, secondary share offerings, insider buying or selling shares, and stock splits (or reverse splits) can cause the number of shares outstanding to change, and thus the float.

Benefits of Trading Low-Float Stocks

Essentially, low-float stocks primarily benefit day traders who are willing to take the risk of making short-term trades with the hope of a quick profit.

By their nature, low-float stocks are volatile. There are relatively few low-float stocks in the marketplace, and their prices tend to go up and down easily and quickly, due to the smaller number of tradable shares. Moreover, every trade of a low-float stock issue can have a larger impact on the value of the stock than it would on a security with a higher float.

For example, when good news hits a security with a limited supply, it doesn’t take much for it to have a huge impact on the share price. A low-float stock can see big gains when demand skyrockets. Conversely, if bad news comes to the same security, its price can drop rapidly. Nonetheless, day traders willing to assume the risk may want to trade low-float stocks

6 Reasons for Low-Floating Shares

Low-float stocks tend to have higher spreads and more volatility than a comparable higher-float stock, where many shares are available to trade. By contrast, investors may find it hard to enter or exit positions in stocks that have a low float. What are some specific instances that could account for low-floating shares?

1. Special Purpose Acquisition Companies (SPACs)

Certain shares may be trading at a low float because the company that’s issuing the stock is part of a special purpose acquisition company (SPAC). A SPAC is a corporation formed for the sole purpose of raising investment capital through an initial public offering (IPO).

Typically, experienced business executives in the same industry as the SPAC’s target acquisition become the founders of a SPAC. A SPAC could take as long as a number of years to complete. And, even when the new company does go public, there may be fewer shares available for public purchase because they’re held by founders of the SPAC or other officers and insiders close to the deal.

2. The Company Is Family Operated

Another reason for low-float shares could be that the company is family owned. In these cases, a family likely would own a significant share of the company’s shares and would influence important decisions, like electing a chairman and CEO. In particular, if a family-operated company is small to midsize, there may be few shares left for the public to buy.

In fact, family-owned or operated businesses abound in the market — including well-known names like BMW, Samsung, and Wal-Mart Stores. About 35% of Fortune 500 companies are family controlled.

3. Stock Buybacks

If a company buys back some of its shares, that may affect its float by reducing the number of shares available for trading; there’s even a name for it: float shrink.

Regular share buybacks, along with dividend payments, are two ways that a company may reward shareholders. Another reason for a share buyback could be for a company to gain better control of its strategic initiatives without needing to consult its shareholders.

4. Company Has Donated Shares to Its Charitable Foundation

If a company founder has donated a large percentage of its shares to an associated charitable foundation, this could result in a lower float, if the foundation has held onto the shares which are then excluded from the overall float count.

5. Initial Public Offerings (IPOs)

In another scenario, a company might be involved in an initial public offering (IPO), in which its shares are considered privately held until the IPO is complete. Once the new shares are made publicly available for trade, a stock could be considered low float because a high percentage of shares are still restricted for a period of time.

6. Stock-Based Compensation

Some companies have initiatives that reward their employees with company stock; either as part of an incentive program or combined with their regular compensation.

A company also could have an equity compensation program in place as a way of rewarding employees, executives, and directors of a company with equity in the business. Depending on the company, these restricted shares could impact float if employees were to redeem a large number of stock options or restricted stock units.

Evaluating Low-Float Stocks

Not every low-float stock represents a good buy, but it is a popular strategy for day traders. To evaluate a low-float stock, day traders often look at several other factors.

High Relative Volume

The relative volume shows a stock’s current volume in comparison to earlier periods in a company’s history. This is important to investors because it can affect a stock’s liquidity. If a stock has low liquidity, traders can potentially get stuck with shares they can’t sell.

They may also find themselves unable to take advantage of news events that impact trading. If a stock’s price changes, but there isn’t a lot of trading volume, it may not be a good pick.

News Events

Positive or negative news about a company frequently makes a low-float stock increase or decrease in a short amount of time.

Day traders keep a close eye on the stock market and corporate news to see which stocks likely would make moves. A news event can cause a low-float stock to move anywhere from 50% to 200% in a single day, as they are in low supply.

Float Percentage

This is the percentage of the total shares of stock available for trading. Each trader has their preferences, but most look for a percentage between 10% and 25%.

How to Trade Low-Float Stocks

When trading a low-float stock, a trader might buy and sell the same stock multiple times in a single day. Then, move on to a different low-float stock the next day in an extreme form of market timing.

Many traders will plan out their profit targets and support and resistance ahead of time, and use stop loss orders to reduce risk. As with any trade, traders can look at technical indicators like candlestick charts and moving averages to see whether a stock looks bullish or bearish.

A good strategy pays attention to technical analysis and rather than simply buying or selling based on rumors or news.

Finding Low-Float Stocks

Finding and evaluating stocks to trade requires some knowledge and experience. Several platforms offer the ability to trade low-float stocks. Some of these platforms allow traders to filter by criteria such as volume and float to find the best opportunities. Traders can look for stocks with a float of less than 50 million and a relatively high volume.

Penny stocks less than $5 are very popular with day traders. Traders can also look to watchlists for ideas about which low-float stocks to trade. There are a number of stock-screening tools investors can use to find low-float stocks.

Some Risks to Know

Every investment comes with risks, but low-float stocks present some particular challenges. Day trading is inherently very risky and can result in significant losses (as well as gains). So, other types of investments are often a better fit for those with a low appetite for risk.

Low-float stocks can have high volatility; their price can change within seconds or minutes. If an investor isn’t careful, knowledgeable, or always on top of it, this volatility could wipe out a large portion of their portfolio. Low-float stocks could also present substantial profit opportunities; traders might see gains of 50% to 200% in a single day.

Looking at both the news and technical indicators is crucial for trading success. Trading low-float stocks requires a daily look at market news, as the stocks that look like a promising trade one day may not be ideal the next.

Test your understanding of what you just read.

The Takeaway

The term “low-float,” as it pertains to stocks, refers to the relatively smaller number of shares available to trade in the public market after the appropriate number of shares are allocated to founders, officers of the company, and other inside investors.

It’s important for investors to be aware of the amount of a company’s low-floating stock, as it can reflect the stock’s liquidity. If a stock has relatively few available issues, it might be harder for traders to sell it.

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FAQ

Is a low-float stock good?

When a company’s stock is considered low float, there are fewer shares available for public trading. That can increase volatility for some investors, while others (like day traders) may be able to leverage changes in the share price.

How important is a stock’s float?

Understanding why a company may have a higher or lower float is an important factor for investors to take into consideration, because it can reveal (or be tied to) other aspects of the company’s management or status.

Are low-float stocks good for day trading?

Low-float stocks can garner huge profits for day traders when a particular industry, sector, or company is in high demand. But when demand shifts, low-float stocks can be risky.

What’s the difference between high- and low-float stocks?

You can find a company’s float by taking the total number of shares outstanding and subtracting the number of shares that are closely held or restricted. If the remainder is a high percentage of the outstanding shares, that’s considered a high-float stock — which can indicate the stock has a certain amount of liquidity.

If the remainder is a small percentage of the outstanding shares, that indicates a low-float stock, which generally has a higher spread, lower liquidity, and may be more volatile.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

Photo credit: iStock/damircudic

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q325-072

Sep

2025

What Is the IPO Process?

By Rebecca Lake | Growing Wealth, invest, Investing | Comments Off

Table of Contents

A Quick Refresher on IPOs
How Does the IPO Process Work?
7 Steps of the IPO Process
What Parties Participate in the IPO Process?
FAQ

Before a private company can make its shares available to the public for investment, it must go through the initial public offering (IPO) process. The IPO process is time-consuming, expensive, and it can take months or even years for a privately held company to reach the stage where it can be listed and traded on a public exchange.

An IPO marks the first time individuals other than angel investors or venture capitalists can make investments in a company. Once the initial public offering process is complete, traders can buy or sell shares in the company through a public exchange like the New York Stock Exchange or Nasdaq.

From an investor standpoint, getting in on the ground floor of a new initial public offering might be appealing if you think the company has the potential to take off. This primer explains how the IPO process works step by step.

Key Points

• An initial public offering (IPO) is the process a private company goes through to make its shares available to the public for investment.

• Companies may choose to do an IPO to raise capital and increase visibility around their brand.

• Prior to an IPO, a company must select an underwriter to conduct due diligence and sign necessary contracts.

• The SEC must review and approve all documents before the company can launch its IPO.

• After the launch, the underwriter may take action to stabilize the share price to help ensure it doesn’t fall below the IPO price.

A Quick Refresher on IPOs

Again, IPO stands for initial public offering. If a company launches an IPO, it means that it’s only had private investors, such as angel investors, up to that point but it’s now ready to let other investors purchase shares. Under federal securities laws, this can’t happen until the company is properly registered with the Securities and Exchange Commission (SEC).

There are different reasons a company may choose to do an IPO, but it’s often used as a means of raising capital. The initial public offer process can also help raise visibility around a particular company’s brand, helping to fuel growth. It means that ownership of the company is transitioning from founders and a few early investors to a much larger group of individuals and organizations.

An IPO can help companies raise capital as an alternative to other methods, such as crowdfunding, which also involves raising funds from a pool of investors. But unlike an IPO, it doesn’t involve the buying or selling of shares in a company.

💡 Quick Tip: Access to IPO shares before they trade on public exchanges has usually been available only to large institutional investors. That’s changing now, and some brokerages offer pre-listing IPO investing to qualified investors.

How Does the IPO Process Work?

At a glance, the initial public offering process seems relatively simple: A private company makes its shares available to the public for the first time, hence why it’s often referred to as “going public.”

But the initial public offering process is more detailed and complex than that. There are specific steps that must take place to ensure that an IPO is completed in accordance with SEC regulations. The company, either on its own or while working with analysts and investors, must value the company and set an initial public offer.

After completing due diligence, the company can move forward with an IPO announcement and choose an IPO launch date. Investors can then review the IPO prospectus to determine whether they want to invest or not.

The entire IPO process can take six months to a year or even longer to complete. Aside from being time-consuming, it can also be costly, so companies must have some degree of certainty that the IPO will succeed before undertaking it.

7 Steps of the IPO Process

The IPO process takes time, and it’s important for all parties involved that the appropriate steps be followed. If something is missed or overlooked, that could put the success of a company’s initial public offering in jeopardy. Here are the steps they must go through:

1. Choosing an Underwriter

Before starting any of the other IPO process steps, a company first has to connect with a reputable IPO underwriter or group of underwriters. Again, these are investment banks that are registered with the SEC to offer underwriting services.

When choosing an underwriter, companies can consider a variety of factors, including:

• Reputation

• IPO track record

• Research quality

• Industry expertise

• Distribution (i.e., what type of investors the bank will be able to distribute the initial public offering to)

Companies may also weigh any prior relationship they have with a particular investment bank or banks when deciding which one(s) to use for underwriting.

2. Due Diligence

During the due diligence phase, the IPO underwriting team will conduct background research into the company and its upper management. This ensures that there are no surprises prior to or during the IPO launch that could affect share pricing.

At this step in the IPO process, the underwriter and the company will sign necessary contracts specifying the scope of services provided. The contract can take several structures:

• Firm Commitment: In this type of arrangement, the underwriter agrees to purchase the IPO and resell shares to the public. This guarantees that the company receives an agreed-upon amount of money.

• Best Efforts: With this type of agreement, the underwriter assents to selling shares to the best of its ability, though there’s no guarantee that all shares will sell.

• All or None: In an all or none or agreement, all shares of the IPO must be sold or the offering is canceled.

In some cases, a group or syndicate of underwriters can come together to oversee the IPO process and manage risk. Each bank in the syndicate can sign a contract with the company to sell part of the IPO.

The underwriters will also initiate the registration process with the SEC and complete supporting documents for the IPO. These might include:

• Engagement Letter: An engagement letter typically includes a clause stating what expenses the company will reimburse to the underwriter as well as the spread that’s used to pay the underwriter’s fees, typically 7% of proceeds.

• Letter of Intent: This letter outlines the underwriter’s commitment or obligations to the issuing company, the company’s statement of commitment to cooperate with the underwriter and an agreement to provide the underwriter with a 15% over allotment option.

• Underwriting Agreement: The underwriting agreement binds the underwriter to purchase shares from the issuing company at a specified price.

• Red Herring Document: A red herring document contains some of the same information about the IPO that’s included in the IPO prospectus, excluding the price and number of shares being offered.

• S-1 Registration Statement: This is the document that’s submitted to the SEC to register the IPO and it must include relevant information about the company that must be included in the prospectus, as well as additional details that are not made available to the public.

3. SEC Review and Roadshow

At this stage of the initial public offering process, the SEC will review all of the documents submitted for the registration. Meanwhile, the company and its underwriting team will prepare for the roadshow.

This IPO roadshow is effectively a marketing strategy in which the underwriters attempt to gauge interest in the IPO from institutional investors. This can help underwriters to set the IPO price and determine what number of shares to offer.

💡 Quick Tip: How do you decide if a certain online trading platform or app is right for you? Ideally, the online investment platform you choose offers the features that you need for your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.

4. IPO Pricing

Once the SEC has approved the IPO, the next critical step is choosing an initial share price. In terms of how an IPO price is set, this can depend on a number of factors, including:

• Company valuation

• Anticipated demand for shares among investors

• Road show outcomes

• Market conditions

• How much capital the company hopes to raise

• The company’s reputation

Pricing is important because it can determine the success or failure of an IPO. Price an initial public offer too high and it may scare off investors; price it too low and the company may not reach its target goal for capital raised once shares go on the market.

5. Launch

Once an IPO has the SEC’s approval and the number and price of shares has been set, all that’s left to do is launch. The company or underwriters typically announce ahead of time when an IPO is set to list so interested investors can ready themselves to buy shares on that date.

6. Stabilization

Stabilization refers to the underwriter taking direct action to stabilize share prices once the IPO launches. This is something underwriters may do for up to 30 days (typically) after an initial public offering hits the market.

In essence, the underwriter can execute what’s known as a stabilizing bid during this period in an effort to support the stock’s price.

However, major investors and company insiders who owned shares before the company went public must continue to abide by SEC rules during this time. Specifically, they’re required to observe the IPO lock-up period rule. This rule prevents them from selling any shares they own in the company for a set time period after the IPO, typically 90 to 180 days. This keeps those investors from dumping their shares prematurely which could affect share prices.

7. Transition to Market Competition

In the final step in the IPO process, the underwriters take a backseat. Rather than relying on the prospectus to determine valuations, shareholders turn their attention to market movements instead. The underwriters can continue acting in an advisory role but at this point, they can no longer do anything to influence pricing.

What Parties Participate in the IPO Process?

It takes a team to successfully launch an IPO, and each member has a distinct role in the initial public offer process. The company is the star player that the team revolves around, with senior management typically taking the lead.

But an IPO also requires assistance from other professionals. Understanding who is involved and what they do can help with navigating the steps of the IPO process.

Investment Banks

One role of investment bankers, also called underwriters, is to effectively oversee and manage the initial public offer process. The underwriting team is responsible for performing some of the most important IPO steps, including:

• Preparing IPO documentation

• Conducting necessary due diligence

• Preparing marketing materials for distribution to investors

• Overseeing the sale of company stock through the IPO

The investment banks serving as underwriters can also help with determining the appropriate valuation of a business as part of the IPO process.

Securities and Exchange Commission (SEC)

Companies must register with the SEC before launching an initial public offering. The SEC must review and accept all documentation the company submits in reference to the IPO prior to shares being sold to the public.

Attorneys and Accountants

Attorneys and accountants work alongside underwriters during the initial public offer process to prepare the required documentation. Legal counsel may draft documents and manage the SEC filing, while accountants may prepare the financial statements that accompany the SEC registration paperwork.

Stock Exchange

Going public with an IPO means choosing an exchange through which traders can buy and sell stock. In the United States, this typically means the New York Stock Exchange (NYSE) or the Nasdaq.

Recommended: What Are the Different Stock Exchanges?

Investors

These include both those who put money into the company prior to its going public, such as venture capitalists, and those who anticipate trading shares once the IPO launches.

Both institutional investors, such as hedge funds or mutual funds, and individual retail investors who are interested in owning shares, may participate in an IPO.

Buying IPO shares may seem desirable, and there has been a lot of hype in the media about IPO stock. But it’s important to remember that IPO stocks are typically high risk, and investors can lose money. That’s why many brokerages require that investors meet certain standards in order to be qualified to trade IPO shares.

Test your understanding of what you just read.

The Takeaway

The process of taking a company public through an IPO can be exciting, but it’s also a rigorous transition that requires a fledgling company to meet a series of criteria and pass through several stages before actually making its debut on a public exchange.

This process helps to ensure that the company has sound fundamentals, and is ready for public shareholder investment. While investing in IPOs has gotten a reputation as a way to make money quickly, it’s also a way investors can rapidly lose their investment, as IPOs are traditionally volatile. In addition, not all investors may qualify to trade IPO shares; check with your brokerage.

Whether you’re curious about exploring IPOs, or interested in traditional stocks and exchange-traded funds (ETFs), you can get started by opening an account on the SoFi Invest® brokerage platform. On SoFi Invest, eligible SoFi members have the opportunity to trade IPO shares, and there are no account minimums for those with an Active Investing account. As with any investment, it's wise to consider your overall portfolio goals in order to assess whether IPO investing is right for you, given the risks of volatility and loss.

Invest with as little as $5 with a SoFi Active Investing account.

FAQ

What is an IPO and how does it work?

An IPO, or initial public offering, is when a company sells shares of its stock to the public for the first time on a stock exchange. Essentially, through an IPO, what was once a private company becomes a public one. Typically, a company starts the IPO process when it is worth a significant amount of money, has demonstrated a proven potential for making a profit, and has a strong enough governance structure to meet SEC listing regulations.

When a company goes public, the private share ownership becomes public ownership. At that point, investors who are qualified to trade IPO shares can start buying shares on the public market.

How long does an IPO process last?

The IPO process can last six months to more than a year. The time it takes is based on how prepared a company is with such things as financial disclosures and governance, how complex the transaction will be, the market conditions, and the time needed for regulatory filings and review by the Securities and Exchange Commission (SEC), among other factors.

Is investing in an IPO good or bad?

Investing in an IPO is not necessarily good or bad. However, investing in an IPO involves a high amount of risk. While some IPOs may offer a potential for a good return, other IPOs may be overvalued by market hype beyond their true worth, for example. In addition, some studies show that IPOs tend to underperform in the market in the years following their market debut. Investors should be aware that IPOs are speculative and high risk.

About the author

Rebecca Lake

Explore the IPO Series:

What Is an Initial Public Offering (IPO)?

What Are IPO Proceeds?

IPO vs Acquisition: Advantages and Disadvantages

How Are IPO Prices Set?

What Is an IPO Underwriter and What Do They Do?

What Is an IPO Roadshow?

How Many Companies IPO Per Year? 2023 Trends

What Is a Quiet Period?

What Is IPO Subscription Status?

Navigating the IPO Lock-up Period

What Is IPO Due Diligence?

How to Find Upcoming IPO Stocks Before Listing Day

What Is an IPO Pop?

What to Do With Company Stock If Your Company Goes Public

IPO Book-Building Process Explained

Hot Issues (IPOs): What You Need to Know

What Is Pre-IPO Placement?

Do IPOs Offer Dividends?

Testing the Waters: What It Means in an IPO

Shorting an IPO: When Can You Do It?

Guide to the Dual-Track Process for IPOs

What Is Gross Spread?

IPO Oversubscription: Definition & Examples

A Guide to Tech IPOs

History of IPOs That Failed

Photo credit: iStock/TimArbaev

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SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement. This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation Procedures.

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An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing.
Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.

This article is not intended to be legal advice. Please consult an attorney for advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOIN-Q325-069

Sep

2025

What Causes a Stock Market Bubble?

By Inyoung Hwang | Growing Wealth, invest, Investing | Comments Off

Table of Contents

What Is a Stock Market Bubble?
The Five Stages of a Market Bubble
FAQ

Stock market bubbles occur when speculative trading and investing, fueled by what could be called irrational exuberance, leads to big increases in values for certain assets. Those value increases may not necessarily be supported by much more than market euphoria, and assets can become overvalued. Eventually, the bubble “pops,” and asset values fall.

Market bubbles occur from time to time, and they aren’t always easy to recognize. They can have different causes, too. In all, it’s important for investors to understand what they are, how they happen, and how they can protect their portfolios from an eventual bubble burst.

Key Points

• A stock market bubble progresses through five stages: displacement, boom, euphoria, profit-taking, and panic.

• Speculative investing drives rapid price increases, often outpacing actual value, creating a self-reinforcing cycle.

• Irrational exuberance leads to overvaluation and increased market participation, fueled by media attention and new financial instruments.

• Investing during the bubble phase risks significant losses due to overvaluation and unpredictable market volatility.

• Recognizing and managing volatility is essential to avoid entering at the peak and to make informed investment decisions.

What Is a Stock Market Bubble?

A stock market bubble is often caused by speculative investing. As investors bid up the stock price, it becomes detached from its real value. Eventually, the bubble bursts, and investors who bought high and didn’t sell fast enough are left holding shares they overpaid for.

Stock market bubbles are notoriously difficult to spot, but they’re famous for potentially causing large-scale consequences, such as market crashes and recessions.

For investors on an individual level, entering the market in the later stages of a bubble could mean painful losses. But misdiagnosing a stock market bubble or exiting from positions too early can result in an investor missing out on potential gains.

The Five Stages of a Market Bubble

Modern-day investors and market observers typically categorize market bubbles based on the principles of Hyman P. Minsky, a 20th century economist whose financial-instability hypothesis became widely cited after the 2008 financial crisis.

Minsky debunked the notion that markets are always efficient. Instead, he posited that underlying forces in the financial system can push actors — such as bankers, investors and traders — toward making bad decisions.

Minsky’s work discussed how bubbles tend to follow a pattern of human behavior. Below is a closer look at the five stages of a bubble cycle:

1. Displacement

Displacement is the phase during which investors get excited about something, typically a new paradigm such as an invention like the Internet, or a change in economic policy, like the cuts to short-term interest rates during the early 2000s by Federal Reserve Chair Alan Greenspan.

2. Boom

That excitement for a new paradigm next leads to a boom. Prices for the new paradigm rise, gradually gathering more momentum and speed as more and more participants enter the market. Media attention also rapidly expands about the new investing trend.

This phase captures the initial price increases of any potential bubble. For instance, after Greenspan cut interest rates in the early 2000s, real-estate prices and new construction of homes boomed. Separately, after the advent of the Internet in the 1990s, shares of technology and dot-com companies began to climb.

3. Euphoria

The boom stage leads to euphoria, which in Minsky’s credit cycle has banks and other commercial lenders extending credit to more dubious borrowers, often creating new financial instruments. In other words, more speculative actions take place as people who are fearful of missing out jump in and fuel the latest craze. This stage is often dubbed as “froth” or as Greenspan called it “irrational exuberance.”

For instance, during the dot com bubble of the late 1990s, companies went public in IPOs even before generating earnings or sales. In 2008, it was the securitization of mortgages that led to bigger systemic risks in the housing market.

4. Profit-Taking

This is the stage in which smart investors or those that are insiders sell stocks. This is the “Minsky Moment,” the point before prices in a bubble collapse even as irrational buying continues.

History books say this took place in 1929, just before the stock market crash that led to the Great Depression. In the decade prior known as the “Roaring 20s,” speculators had made outsized risky bets on the stock market. By 1929, some insiders were said to be selling stocks after shoeshine workers started giving stock tips, which they took to be a sign of overextended exuberance.

5. Panic

Panic is the last stage and has historically occurred when monetary tightening or an external shock cause asset values to start to fall. Some firms or companies that borrowed heavily begin to sell their positions, causing greater price dips in markets.

After the Roaring 20s, tech bubble, and housing bubble of the mid-2000s, the stock market experienced steep downturns in each instance — a period in which panic selling among investors ensued.

💡 Quick Tip: Are self directed brokerage accounts cost efficient? They can be, because they offer the convenience of being able to buy stocks online without using a traditional full-service broker (and the typical broker fees).

The Takeaway

One of the prevailing beliefs in the financial world is that markets are efficient. This means that asset prices have already accounted for all the information available. But market bubbles show that sometimes actors can discount or misread signs that asset values have become inflated. This typically happens after long stretches of time during which prices have marched higher.

Stock market bubbles may occur when there’s the illusion that share prices can only go higher. While bubbles and boom-and-bust cycles are part of markets, investors should understand that stock volatility is usually inevitable in stock investing.

¹Opening and funding an Active Invest account gives you the opportunity to get up to $3,000 in the stock of your choice.

FAQ

What is the primary cause of a stock market bubble?

Generally, a stock market bubble is caused by speculative investing and trading, but not always. Increased speculation can cause assets to see their values increase far beyond what might be expected, leading to a bubble.

What are the five stages of a market bubble?

The five stages of a market bubble are displacement, the boom, euphoria, profit-taking, and finally, panic, as the bubble bursts.

Is it easy to recognize a stock market bubble?

While there may be times when an investor believes they see a market bubble forming, they could be wrong. Often, it’s difficult to recognize a market bubble, but it may be important for wary investors to take measures to protect their portfolios as best they can.

Photo credit: iStock/fizkes

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

CRYPTOCURRENCY AND OTHER DIGITAL ASSETS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

Cryptocurrency and other digital assets are highly speculative, involve significant risk, and may result in the complete loss of value. Cryptocurrency and other digital assets are not deposits, are not insured by the FDIC or SIPC, are not bank guaranteed, and may lose value.

All cryptocurrency transactions, once submitted to the blockchain, are final and irreversible. SoFi is not responsible for any failure or delay in processing a transaction resulting from factors beyond its reasonable control, including blockchain network congestion, protocol or network operations, or incorrect address information. Availability of specific digital assets, features, and services is subject to change and may be limited by applicable law and regulation.

SoFi Crypto products and services are offered by SoFi Bank, N.A., a national bank regulated by the Office of the Comptroller of the Currency. SoFi Bank does not provide investment, tax, or legal advice. Please refer to the SoFi Crypto account agreement for additional terms and conditions.

SOIN-Q325-121

Aug

2025

Do College Rankings Matter?

By David Wolinsky | Going to College, Student Loans, student_loan | Comments Off

Table of Contents

What Are the College Rankings?
What Really Matters
The Bottom-Line Question
FAQ

While college rankings matter, it can be a good idea to view them through a lens of what matters most to you about the college experience and what you’re hoping to get out of it.

Colleges and universities each have different strengths and weaknesses, and published rankings can help you learn which schools are the strongest in different areas, and whether or not a college has improved or lagged behind other schools in recent years.

Rankings may also allow you to filter schools by selected academic and nonacademic characteristics, and help you hone in on schools that may meet your specific needs.

That said, rankings aren’t everything. Even U.S. News & World Report says on its best-colleges website: “The rankings provide a good starting point for students trying to compare schools.… The best school for each student, experts say, is one that will most completely meet his or her needs, which go beyond academics.

Here’s what you need to know about college rankings.

Key Points

• College rankings are useful but generally shouldn’t be the only factor in choosing a college.

• A highly ranked college can offer stronger networking and research opportunities, as well as perceived prestige.

• Also consider your academic goals, budget, and desired experiences when evaluating colleges.

• Campus visits and conversations with current students can provide valuable insights.

• Use college guide books and other resources to gather additional information.

What Are the College Rankings?

There is no single, ultimate, college ranking. All over the world, there are entities using a wide array of criteria to appraise universities and determine which ones are “the best.”

The factors an organization or company will use to come up with their college rankings can vary, which is why you might see a school ranked #3 on one list and #9 on another. However, here are some factors list-makers will commonly consider when ranking schools:

• Student-faculty ratio

• Class sizes

• First year retention rates

• Graduation rates

• Post-graduation employment statistics

• Student debt after graduation

• Acceptance rates

• ACT and SAT scores

• Endowment size

• Academic reputation

• Faculty salaries

• Research output

Though college rankings typically consider a large amount of information, they won’t tell you everything you need to know about a college. As a result, you may want to use rankings as one of many factors to make your list of prospective colleges. Ideally, you want to find a school that matches your interests, needs, goals, and budget.

💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

What Really Matters

Although many groups rank colleges, the term “college rankings” commonly refers to the U.S. News & World Report list, which rewards graduation rates and reputation.

But there’s also The Princeton Review, which drills down on other factors like quality of life, extracurriculars, social scene, and town life. They even rank colleges with “Lots of Beer,” based on student ratings of how widely beer is used at their schools, and “Lots of Greek Life,” based on student ratings of the popularity of fraternities and sororities at their schools.”

As you look at different college rankings, you’ll want to keep your own priorities in mind, whether that’s finding the best school for your chosen field, honing in on schools that have the smallest class sizes, or finding a school that is known for being a good value.

You may want to use college rankings in combination with a number of other resources, including college guide books and talking to friends and family that have gone (or currently go) to schools that interest you. College tours can also provide a wealth of information about a school.

💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

The Bottom-Line Question

No discussion of college would be complete without touching on what you can afford to spend. Is going to college worth it? The answer depends on how much your chosen college will cost, how much aid you will get, how much you will need to borrow, and what you plan to do with your degree.

To get a sense of what a college will cost you out-of-pocket, a good first step is to fill out the Free Application for Federal Student Aid (FAFSA), which considers eligibility for grants, federal student loans, and work-study programs. But even after scholarships, federal aid, and any college savings plans, many students come up short when all education expenses are tallied.

At that point, you may want to consider private student loans. These are available from private lenders, such as banks, credit unions, and online lenders. Rates and terms will vary depending on the lender, so it can be well worthwhile to shop around. Borrowers (or cosigners) with excellent credit tend to qualify for the lowest rates. Just keep in mind that private student loans don’t necessarily offer the same protections, like income-driven repayment, that come with federal student loans.

The Takeaway

College rankings can be a useful tool in your search, but they tend to be best used as a starting point, not the deciding factor. While rankings can help highlight a school’s strengths and unique characteristics, they don’t capture the full picture of campus culture, support systems, or personal fit.

Your ideal school is the one that aligns with your academic goals, financial realities, and the experience you want to have — both inside and outside the classroom. Use ranking in combination with campus visits, conversations with current students, and your own priorities to find the college that feels like the right match for you.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Do universities care about rankings?

Universities often care about rankings as they can influence reputation, student applications, and funding opportunities. High rankings can attract top faculty and students, enhance prestige, and provide a competitive edge in the academic world. However, not all institutions prioritize them equally. Some focus more on academic mission, student experience, or community impact than on external ranking systems.

Do university rankings matter?

University rankings can matter, but their importance depends on your goals. For some students, a highly ranked school offers stronger networking opportunities, research resources, and perceived prestige. However, rankings don’t always reflect teaching quality, campus culture, or fit for individual students. They’re often based on quantifiable metrics, such as research output and reputation surveys, that may not match every student’s priorities. Ultimately, rankings can be one factor, but not the only one, in choosing a school.

Why do people care so much about college rankings?

People care about college rankings because they provide a quick, comparative measure of institutional quality. A higher-ranked school is often associated with better job prospects, stronger alumni networks, and academic excellence. Social pressure and media coverage amplify their significance, making rankings seem like a decisive factor, even though individual fit may matter more.

SoFi Private Student Loans
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Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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SOISL-Q325-087

How Stock Listings Work

What Does Delisting a Stock Mean?

Exchange-Initiated Stock Delisting

Company-Initiated Stock Delistings

What Happens If a Stock Is Delisted?

What to Do If a Stock You Own Is Delisted

The Takeaway

FAQ

Why would a stock get delisted?

Is delisting a stock good or bad?

What happens to my stock if a company delists?

Stock Float: Quick Recap

What Are Low-Float Stocks?

Understanding Shares Outstanding

Floating Stock, Example Calculation

Importance of Low-Float Stocks

Get up to $1,000 in stock when you fund a new Active Invest account.*

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Benefits of Trading Low-Float Stocks

6 Reasons for Low-Floating Shares

1. Special Purpose Acquisition Companies (SPACs)

2. The Company Is Family Operated

3. Stock Buybacks

4. Company Has Donated Shares to Its Charitable Foundation

5. Initial Public Offerings (IPOs)

6. Stock-Based Compensation

Evaluating Low-Float Stocks

High Relative Volume

News Events

Float Percentage

How to Trade Low-Float Stocks

Finding Low-Float Stocks

Some Risks to Know

The Takeaway

FAQ

Is a low-float stock good?

How important is a stock’s float?

Are low-float stocks good for day trading?

What’s the difference between high- and low-float stocks?

A Quick Refresher on IPOs

How Does the IPO Process Work?

7 Steps of the IPO Process

1. Choosing an Underwriter

2. Due Diligence

3. SEC Review and Roadshow

4. IPO Pricing

5. Launch

6. Stabilization

7. Transition to Market Competition

What Parties Participate in the IPO Process?

Investment Banks

Securities and Exchange Commission (SEC)

Attorneys and Accountants

Stock Exchange

Investors

The Takeaway

FAQ

What is an IPO and how does it work?

How long does an IPO process last?

Is investing in an IPO good or bad?

Explore the IPO Series:

What Is a Stock Market Bubble?

The Five Stages of a Market Bubble

1. Displacement

2. Boom

3. Euphoria

4. Profit-Taking

5. Panic

The Takeaway

FAQ

What is the primary cause of a stock market bubble?

What are the five stages of a market bubble?

Is it easy to recognize a stock market bubble?

What Are the College Rankings?

What Really Matters

The Bottom-Line Question

The Takeaway

FAQ

Do universities care about rankings?

Do university rankings matter?

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