Over-subscribing to an IPO
In some cases, IPOs may be oversubscribed. The company may go through a balloting/allocation process to determine whether an investor will receive any shares and if so, in what quantity. An investor may be tempted to subscribe for a greater quantity than he intended to, believing that he will not receive the full amount in case of over-subscription. However if the IPO is not oversubscribed, the investor will receive all the quantity applied for and will have to pay the full cost.
There is a risk that the company's share price will drop below its initial IPO price, once the company's shares trading (on the stock market or otherwise) commences. Shares prices will fluctuate over time.
It is vital to understand the company and the business you are investing in. Thoroughly study the prospectus, financial reports and even seek professional advice before you make investment decisions.