An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors. After the IPO, when shares trade freely in the open market, money passes between public investors. Although an IPO offers many advantages, there are also significant disadvantages. Chief among these are the costs associated with the process, and the requirement to disclose certain information that could prove helpful to competitors, or create difficulties with vendors. Details of the proposed offering are disclosed to potential purchasers in the form of a lengthy document known as a prospectus. Most companies undertaking an IPO do so with the assistance of an investment banking firm acting in the capacity of an underwriter. Underwriters provide a valuable service, which includes help with correctly assessing the value of shares (share price), and establishing a public market for shares (initial sale). Alternative methods, such as the dutch auction have also been explored. In terms of size and public participation, the most notable example of this method is the Google IPO. China has recently emerged as a major IPO market, with several of the largest IPO's taking place in that country.
Read more about Initial Public Offering: History, Reasons For Listing, Advance Planning, Disadvantages of An IPO, Procedure, Dutch Auction, Pricing of IPO, Quiet Period, Stag Profit, Share Delivery, Largest IPOs, Value of IPOs
Other articles related to "initial public offering, public, offering, initial":
... Nielsen went in for an IPO (NYSE NLSN) in January 2011 and was the largest public offer in the United States in the previous four years ...
... In May 2011, Solazyme set terms for its initial public offering ... company planned to raise $160 million by offering 10 million shares at a price range of $15 to $17 and ended up selling nearly 11 million shares for $18 each, and climbed 15% to 20.71 ...
... The initial capitalization of Trillium when it was incorporated was $1,000 ... and accelerate its growth it should raise money through an initial public offering ... with investment bankers, it was decided that to improve its initial public offering valuation, it would be necessary to first raise some private equity money to fund organizational expansion, revenue growth ...
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