Initial public offering (IPO)

  • An IPO is when a company initially offers shares of stocks to the public (going public).Through this process, a private company transforms into a public company.
  • IPOs can be issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
  • A company can raise money by issuing either debt or equity.
  • Initial public offering (IPO) or stock market launch is a type of public offering in which shares of stock in a company are usually sold to institutional investors, who help determine what type of security to issue (common or preferred), the best offering price and the time to bring it to market,  in turn sell to the general public, on a securities exchange, for the first time.

 

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