What is an Initial Public Offering (IPO)?
An Initial Public Offering (IPO) is the process by which a private company offers its shares to the public for the first time by listing them on a stock exchange. This allows the company to raise capital from public investors. The IPO process involves determining the price of the shares, issuing them to the market, and making the company publicly traded.
Key Points:
- Private to Public: The company transitions from being privately held to publicly traded.
- Raising Capital: The company raises funds by selling shares to investors.
- Stock Exchange Listing: Shares are listed on a stock exchange for public trading.
IPOs are often used by companies to expand their operations, pay off debt, or provide an exit strategy for early investors.
