2007-10-11 06:28:05 · 2 answers · asked by Anonymous in Business & Finance ➔ Corporations
IPO: The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.
In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market.
Also referred to as a "public offering".
IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, and they are therefore subject to additional uncertainty regarding their future value.
Should You Invest in an IPO?
Many investors get excited by an IPO or initial public offering. Should you invest in an IPO or should you stick to established businesses?
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2007-10-11 15:24:27 · answer #1 · answered by Sandy 7 · 0⤊ 0⤋
An IPO is an initial public offering. This is when a private company wants to cash in on its value so it divides itself into shares that it sells on the stock market. At this point, investors have an opportunity to take ownership in the company by buying shares of its stock.
2007-10-11 06:34:36 · answer #2 · answered by Nikolas M 5 · 0⤊ 0⤋
Inital Public Offering- When a corporation wants to raise capital it can "go public" by issuing shares of common stock for sale to investors.
2007-10-11 06:34:43 · answer #3 · answered by Michael D 2 · 0⤊ 0⤋