Chapter 4 of 8
What is GMP?
IPO Label · · About 1 minute to read
A price some people quote for a share before it is listed. It is a rumour, not a fact.
Before a new share can be bought on the exchange, some people buy and sell it privately among themselves.
The extra they are willing to pay, over the price the company set, is called the grey market premium.
New word
GMP
Grey Market Premium. The extra amount being talked about for a share before it starts trading.
- The price the company set
- The price being talked about
Nobody records these deals anywhere. That is why two websites can print two different numbers on the same day.
We show it because people want to see it, and we always call it a rumour.
Remember
A GMP is not a promise and it is not a price you can get. It changes every day, and it is often wrong.