Initial Public Offer (IPO)

Initial public offering (IPO) or stock market launch is a type of public offering in which shares of stock in a company usually are sold to institutional investors that in turn, sell to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are mostly used by companies to raise the expansion of capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises.