InvestorWords.com

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.

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