Initial Public Offering

Posted on February 20, 2011 by Thomas DeGrace

Initial Public Offering (IPO) is a company’s first offering of stock to the public in order to raise money.

Understand How Initial Public Offering Works

In order for a company to go public, that company would need to have millions in revenue or earnings.  Individuals can’t buy IPO share unless you are affiliated with the underwriter for the initial public offering.

There are several reasons for a company going pubic:
1.  Give initial investors & owners liquidity to sell
2.  Boost their public exposure and image.
3.  Attracting new investors.
4.  Using proceeds from the IPO to pay down down or grow the company.
5.  Have easy access to new capital for future needs.
6.  For future acquisitions
7.  For employee stock options and stock compensation.

Related posts:

  1. Secondary Offering
  2. Float
  3. Stop Order
  4. Hedge Fund

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