What is an IPO?

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Known colloquially as going public, an IPO stands for Initial Public Offering and is a type of stock market launch whereby shares of a company are sold to the general public on a securities exchange.

A company transitions from being privately held, to a public company, as a result of an IPO.

The main reason for a company to file an IPO is to raise money and expand capital. However a company may decide to go public purely to move away from being privately held, or alternatively to boost investments made by early private investors.

Advantages of an IPO
There are various benefits to going public – from boosting public image with increased media exposure, to attracting and retaining better staff through liquid equity participation. However, the main benefits revolve around money, chiefly the enlarging and diversifying of equity base.

Going public also affords a previously private company with cheaper access to capital as well as the facilitation of acquisitions. An IPO also creates multiple ways in which to generate finance opportunities, be it equity, convertible debt, or cheaper bank loans.

What is an IPO

Continue reading to find out who holds the record for the biggest IPO ever.

 

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