What Is an IPO? How an Initial Public Offering Works
What Is an IPO?
An initial public offering (IPO) is the event in which a private company converts to a public company by offering for sale a portion of its ownership through newly issued shares, enabling public investors to purchase equity and allowing its stock to trade on a public exchange.
Beyond raising significant capital for growth or paying down debt, it gives founders, early backers, and employees a chance to realize gains on their investments.
But an IPO is a journey, not a switch. It typically begins with selecting an investment bank to underwrite the deal and assist with valuation. From there, companies undergo audits, prepare regulatory filings (such as the S-1 in the U.S.), refine financial forecasts and…
