What consequence can negative press have on an IPO?

Negative press can significantly influence investor sentiment, particularly in the context of an IPO. When a company is subject to unfavorable media coverage, whether it is about its financials, management decisions, or potential risks, it can create skepticism among potential investors. This skepticism often translates into decreased demand for the company’s shares, as investors may question the stability and future prospects of the company.

As demand for the shares drops, the company may be forced to lower its offering price to attract buyers. A lower offering price can result in less capital raised for the company than initially anticipated, affecting its ability to fund operations, repay debts, or invest in growth opportunities. Overall, negative press can create a challenging environment for an IPO, impacting both the perception of the company in the market and its financial success post-IPO.