Lesson 3 of 7 · 4 min read
What GMP means and why it's unreliable
Grey market premium is popular on social media. Here's why it shouldn't drive your decision.
GMP, or Grey Market Premium, is the extra amount over the issue price that some people are informally willing to pay for IPO shares before they list. It's quoted on websites and in messaging groups.
Why GMP is unreliable
- It's unofficial and unregulated: there is no exchange, no record and no investor protection.
- Volumes are small and opaque, so a few participants can move the quoted number.
- It changes quickly with market mood and can reverse just before listing.
- It measures expected listing-day demand, not the long-term value of the business.
Key takeaways
- GMP is unofficial, unregulated and easily distorted.
- Even when accurate, it only reflects short-term sentiment.
- Base decisions on the business, financials, valuation and risks instead.
Terms in this lesson
Educational content only. Not investment advice.