Initial Public Offering (ipo)

An Initial Public Offering is the first sale of privately owned equity (stock or shares) in a company via the issue of shares to the public and other investing institutions. In other words an IPO is the first sale of stock by a private company to the public. This is known as floating on the market. IPOs typically involve small, young companies raising capital to finance growth. For investors IPO´s can risky as it is difficult to predict the value of the stock (shares) when they open for trading. An IPO is effectively ´going public´ or ´taking a company public´.