The quality of a security, good or service having a price which does not correctly match the intrinsic value of the item. When a company goes public in an IPO, it must necessarily guess at what the offer price should be, and therefore runs the risk that either it's too low (in which case it could've raised more money) or it's too high (and there isn't sufficient investor interest). In either case the IPO would be said to be mispriced. The term is sometimes also used for public companies when an investor feels that a stock's market price doesn't match the value of the underlying business.

Use mispriced in a sentence

You should try and see if you can notice any mispriced security and take advantage of it before the error is corrected.

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My hedge fund manager asked me if I was willing to invest in distressed bonds because he believes these equities were severely mispriced.

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The security was reportedly mispriced so we decided to take our financial adviser's recommendation and double down our investment in the company.

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