IPO Market of Common Stocks: Valuation, Price Determination, and Market Players´ Behavior

In the IPO market, investors face two major risks. One is that the issuer\´s enterprise value might keep changing. The other is that the information about the enterprise value from the issuer and the investment banker might not be true enough. There will be the "lemon market" problem when investors are only able to rely on the relevant publicly disclosed information. The "lemon market" may gradually drive many investors out of the secondary market, which will lead to the whole shrinkage of the primary and the secondary market. The countermeasures lie in two aspects, the improvement of the self-discipline of the market participants, and the enhancement of the supervision of these participants.