What is an Initial Public Offering (IPO)

 

The acronym IPO is well known to those in the financial, investment or stock market arena but to the ‘average Mary or Joe’ who is not savvy in any those of areas, maybe not. So, let’s change that.

An IPO is otherwise termed as an “Initial Public Offer”. It is the first introduction of and sale of stock to the public by a company or existing holders of a share or shares in a company. The public is invited to jointly own the company by way of purchasing shares as an investment in its present and future development and profit growth. The company’s offer is usually set out in what is called an IPO Prospectus.

IPO Prospectus

The prospectus provides an overview of the company— what it does, its strategies, objectives, financial data, management personnel, and of course, the number of shares for sale, the price and the use of the proceeds.

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