An initial public offering (IPO) in which the security falls in price (i.e., sells below the IPO price) on the first day of trading on the secondary market. This shows that investors are not much interested in the deal. To alleviate such a lack of interest and its potentially bad consequences on the whole issue, underwriters are usually allowed to make stabilizing bids. That is, they purchase the security to help keep it from dropping below the initial price.

It is also referred to as a broken IPO.