Initial Public Offering

Definition

IPO. The first sale of stock by a company to the public. The most common reason for a company to initiate an IPO is in order to raise more capital. One of the most difficult parts of an IPO is to determine the proper price to initially offer the new stock; too high and investors won't be interested, but too low and the company is sacrificing the amount of money that might have been made if they priced it higher. There is generally a significant amount of risk in an IPO, because the company going public is frequently small or relatively unknown, and hasn't had a chance to prove itself to the public; as such, they also have the capacity for significant payoffs.

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The initial public offering as a monumental moment in the history of our firm as we finally went public and thrived.

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The business decided to initiate an initial public offering, when they created a product that caused their profits to more than triple.

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After the board meeting they decided to move forward with taking the company public. They decided on initiating their initial public offering in the 3rd quarter.

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stagging public offering price