Initial Public Offering (IPO)

The technical term for a company’s going public, where it allows the public to purchase its shares.

An Initial Public Offering (IPO) refers to an event where a private establishment allows the public to buy and own its shares for the first time in its history. It is the surest evidence that a business venture that used to be private is interested in including the public in its shareholding, effectively becoming a public company. The process is often complex as it requires the scrutiny of Securities and Exchange Commissions (SECs) before it can be approved.

Although IPOs generally subject private companies to greater scrutiny from regulatory authorities, they also allow them to expand the company’s capital legitimately and ultimately profitably.