Initial public offering (IPO),
Definition of Initial public offering (IPO):
An act of offering the stock of a company on a public stock exchange for the first time.
An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. Public share issuance allows a company to raise capital from public investors. The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes share premiums for current private investors. Meanwhile, it also allows public investors to participate in the offering.
First offering of a firms stock (shares) on the stockmarket, at the time it goes public. Because a stockmarket usually values the stock on the expectations of the firms future growth and income, IPOs are typically an opportunity for the founders and other early investors to make high profits by cashing their stockholdings.
A company planning an IPO will typically select an underwriter or underwriters. They will also choose an exchange in which the shares will be issued and subsequently traded publicly.
How to use Initial public offering (IPO) in a sentence?
- 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.
- When stocks are soaring and initial public offerings are raking in the money, it can seem like a bull market will never end.
- The initial public offering for the stock was really high and that made everyone pay closer attention to what happened next.
- If your company is about to go on the market then you need to hope many people take up your initial public offering .
- IPOs provide companies with an opportunity to obtain capital by offering shares through the primary market.
- An initial public offering refers to the process of offering shares of a private corporation to the public in a new stock issuance. .
- Companies must meet requirements by exchanges and the SEC to hold an initial public offering.
- If you know of a new company that you think will succeed you may want to take a chance on its initial public offering .
- Companies hire investment banks to market, gauge demand, set the IPO price and date, and more.
Meaning of Initial public offering (IPO) & Initial public offering (IPO) Definition