The reason why it is hard to buy shares in an IPO is because demand is higher than supply. That's true. But why demand for shares in an IPO is so high? (Empirically, most IPOs in the US are oversubscribed). It is because IPOs are usually underpriced.

In period from 1980-2001, on average, if an investor can buy shares in an IPO and sell them immediately at the end of the first trading day, she can earn a return of 18.8%. Imagine that you get up in the morning with $1,000 and go to bed at night with $1,188 virtually without doing anything. It seems to be more profitable than drug trafficking. The first-day return is even more dramatic during the Dotcom bubble (late 1990s) when an investor buying shares of internet firms could earn an average first-day return of 89%.

Several studies have attempted to explain why IPOs are underpriced but the evidence so far is not conclusive. Some well-known explanations in the literature are:

(1) High-quality firms want to signal that they are good firms (as opposed to bad firms) by "leaving money on the table" in the IPO. In fact, empirical evidence about this signaling theory is mixed...

Full story: Vietnam Stock Market News: Why is it hard to buy shares in an IPO?

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Vietnam Stock Market News: http://www.vnstocknews.com

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it is hard to get shares in ipo because in the ipo shares are alloted on the bases of demand and supply . if the demand is more than probability of getting shares is less and vice-versa.

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