Initial Public Offerings (IPOs)
An initial public offering (IPO) is the first sale of a company’s stock to the public and the point at which the company is listed on a regulated stock exchange. The IPO is the point at which a company goes public. IPOs can involve sale to institutional investors and retail investors. Offerings can be primary, in which the company creates and sells new shares; or secondary, in which case the sale will be of existing stock made available by existing shareholders, or a mix. The process of going public is highly regulated and follows a set order. Companies will appoint IPO advisors and underwriters. Their role is to gauge demand ahead of the sale, set a pricing range in marketing, fix the price, allocate stock and manage the aftermarket.