How ‘Low Floats’ Boost IPOs—and Create Risks for Investors

Arm and Instacart just offered the public a “low float” as part of each company’s IPO, meaning that they offered a small number of shares to public investors, often resulting in too little supply to meet the demand, which can cause a stock to pop at the open. These companies aren’t the only ones, though.  

Corporations recently have been stingier with the number of shares offered to the public. In, 2021 and 2022, the average float stood at approximately 18% and 19%, respectively, the lowest in over four decades, according to Cordell Eminent Scholar Jay Ritter.

Read more in this story from Barron’s.