Investors took a gamble on shares of Caesars Entertainment (CZR), pushing shares up more than 75% Wednesday in the first day of trading.

Traders paid little heed to all the red flags surrounding the stock, such as the vast number of shares that will flood the market in the future. Caesars sold shares at $9 each, but by midday Wednesday the stock price had climbed to $16.

This is an incredibly tiny IPO. The casino operator sold only 1.8 million shares, or about 1.4% of its outstanding stock. It was able to raise just $13.1 million after expenses. That's a far cry from the $575 million the company wanted to raise in 2010, when it planned to go public as Harrah's Entertainment.

"This (IPO) is the dumbest thing I've ever seen," CNBC's Gary Kaminsky says in the following video.

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Caesars cut the IPO to $530 million and then canceled it completely, The Associated Press reports. When the IPO market began picking up last year, it tried again with a goal of raising $50 million.

Why would anyone jump into this IPO? Good question. The company gets more than 90% of its sales from casinos across the U.S. and its biggest market, Las Vegas, saw revenue rise 6.5% in the first nine months of 2011, Bloomberg reports. But other markets didn't fare as well, in some cases losing revenue.

Caesars has chosen to focus in the U.S. instead of Macau, the world's largest gambling center, Bloomberg reports. That's where Las Vegas Sands (LVS) and Wynn Resorts (WYNN) are cleaning up. Gambling revenue in Macau rose 42% last year.

Clearly, investors hope an improved U.S. economy can help Caesars this year.

Perhaps the biggest problem with this IPO is that future offerings are all but assured. The company was taken private in a $31 billion buyout in 2008, and you can bet that those investors want their money back.

The IPO filing says current investors may sell 34.7 million shares after the offering. That will have an incredibly dilutive effect on shares.

"As the stock goes up, we're sitting here bracing ourselves for another sale," an analyst with Sterne Agee & Leach told Bloomberg. "It is a tough story unless you assume the domestic economy comes roaring back."