Terms

Initial Public Offering

Abbreviation
IPO

An IPO or Initial Public Offering is a company’s way of offering shares of a private corporation to the public on a new stock issuance. It is the first time a privately-owned company gives up parts of its ownership to shareholders. IPOs provide companies with an opportunity to obtain capital by offering shares through the primary market. An IPO can be seen as an exit strategy for the company’s founders and early investors, realizing the full profit from their private investment.