Investing in Initial Public Offerings (IPOs) carries several risks: Volatility: IPO stocks can experience significant price swings due to market hype or uncertainty. Limited Information: New companies may provide less historical data, making it harder to assess their financial health. Lock-Up Periods: Insiders may be restricted from selling shares initially, leading to potential price drops when restrictions lift. Overvaluation: IPOs can be overpriced due to high demand, leading to losses if the stock underperforms after listing. Business Risk: New public companies may struggle to maintain profitability or growth.