IPO

An IPO (Initial Public Offering) is the first listing of a company’s shares, i.e., its initial public offering. In this process, a company transforms from a private entity (often owned by founders or venture capitalists) into a publicly traded corporation.

This process primarily serves to raise capital and realize profits for existing investors. By issuing new shares, the company can obtain fresh capital that it can use for expansion, research, or debt reduction.

For investors, an IPO represents the first opportunity to subscribe to shares at a set offering price before trading begins. Success depends heavily on market conditions and valuation. Since young companies new to the stock market often provide less historical data than established corporations, participating in an IPO is more speculative than buying existing shares.