IPO

Initial Public Offering

The process by which a private company becomes a public company by offering its shares to the public for the first time on a stock exchange. This allows the company to raise capital from public investors in exchange for equity ownership.

During an IPO, the company works with investment banks to underwrite the offering, determine the offering price, and facilitate the sale of shares to investors. The IPO process involves extensive regulatory requirements and disclosures to ensure transparency for investors.

Once the IPO is completed, the company’s shares are traded on the stock exchange, allowing investors to buy and sell them freely. IPOs can provide significant liquidity for existing shareholders, such as founders and venture capitalists. They can also raise funds for the company to finance growth, pay off debt, or pursue other strategic initiatives.

• Abbreviation: IPO