Glossary
Initial Public Offering (IPO)
The first sale of a company's shares to the public, taking it from private to listed.
An Initial Public Offering is the first sale of a company's shares to the public, transforming it from a private to a publicly traded firm and creating an exit for early investors and employees who hold restricted stock.
The process typically involves an investment-bank syndicate that underwrites the offering, sets the price range through a roadshow with institutional investors, and allocates shares ahead of listing day.
IPO performance is notoriously bimodal — early-day pops on hot deals contrast with a long-term tendency for IPOs as a class to underperform broader indices over three to five years after listing.