What is an IPO?
by John Jagerson An initial public offering (IPO) is essentially the birth of a company in its public form. It changes many things about the way that management runs the firm and can present opportunities and dangers for retail investors. IPOs are more common during bull markets and the recent rally in stocks may provide another fertile environment for these corporate events.
The Initial Public Offering (IPO) for a new public company is the first opportunity for the investing public to be able to purchase shares in the company. An IPO is a very exciting time for the company, and IPOs are often eagerly anticipated by the investing public as well. There are several reasons for which a private company may wish to become a public company. The two biggest reasons are to raise capital and to allow the original investors or entrepreneurs who started the company to realize profits on their investment and time. A private company is one in which investment or ownership is limited to select individuals or organizations. A public company is one in which anyone can invest and obtain ownership by purchasing shares on a publicly traded exchange. Undertaking an IPO is a large and exciting event for a new company. A well received IPO means that the company will have cash to further its development and growth. It also usually means that the people who started the company rea
