What Is an Initial Public Offering (IPO)?
An initial public offering (IPO) enables a private company to go public by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow.
Investors can easily get caught up in the excitement of an IPO’s first day of trading. To raise the stock price and attract investors, the company will go all-out to build interest and buzz. The company’s senior management team often rings the opening bell of the stock market and ramps up an intense media campaign. For this reason, the share price of an IPO may jump sharply on the first day of trading.
IPOs can be a great way for mom-and-pop investors to benefit from big gains in growing companies. But it is important to understand this type of
