A first public offering
IPO stands for initial public offering: a company's first public offering of its shares. A share represents an ownership interest. Going public often accompanies an exchange listing and brings ongoing disclosure obligations.
Why companies choose it
A company may seek capital for its business, broader access to future financing, a market for existing owners' shares, or stock it can use in acquisitions and employee compensation. Becoming public also adds disclosure, governance, and administrative costs.
- New shares sold by the company raise money for the company.
- Existing shares sold by a shareholder pay that seller; those proceeds do not fund the company.
A milestone, not a forecast
An IPO does not establish that a business is profitable or that its stock will rise. Public companies can lose value or fail. Common shareholders may receive nothing in a liquidation after higher-priority claims are paid.
Your research checklist
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Check current documents before making a decision. SEC review and a regulatory filing are not endorsements of an investment. This guide provides general education, not advice about your circumstances.