Initial public offering (IPO)

An IPO refers to the process of offering shares of a private corporation to the public in a new stock issuance for the first time. In essence, an IPO means that a company’s ownership is transitioning from private ownership to public ownership. This si why the IPO process is sometimes referred to as “going public.” Companies typically issue an IPO to raise capital to pay off debts, fund growth initiatives, improve their public profile, or to allow company insiders to diversify their holdings or create liquidity by selling all or a portion of their private shares as part of the IPO.