Initial Public Offering (IPO)

What is it? The first time a company sells shares of its stock to the public. Also known as going public, an IPO can generate funds for working capital, debt repayment, acquisitions, and a host of other uses. The stock prices of many Internet companies have skyrocketed immediately after their IPOs, making instant millionaires of company insiders who own shares or have stock options. It is difficult for outsiders to get shares of hot issues before the IPO at the public offering price. Generally, they must wait until the company goes public and pay a premium for the shares.

Added By: Ella

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