Initial Public Offering (IPO)
Initial Public Offering (IPO)
An Initial Public Offering is when big private businesses issue new stocks that can be bought by the public, for the first time.
There are a set of guidelines and requirements that have to be met, created by various exchanges and the Securities & Exchange Commission (SEC). The price at IPO is set by estimating what demand will be like, usually investment banks advise companies on such details.
Why? It’s all about the money. IPOs allow companies to raise capital by selling shares, improve cash flow and ultimately increase the value of the company.
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