What is an IPO (Initial Public Offering)?

An IPO, or Initial Public Offering, is the process by which a private company offers shares to the public for the first time, effectively becoming a publicly traded company. Companies usually go public to raise capital for expansion, pay off debt, or fund research and development. The IPO process involves selecting underwriters, setting the price of the shares, and listing the company on a stock exchange. Once the IPO is complete, the company’s stock can be bought and sold by the public, allowing investors to buy a stake in the company.