Initial Public Offering (IPO)

An Initial Public Offering (IPO) is when a private company sells shares to the public for the first time, becoming a publicly traded company. You'll hear about IPOs in financial news because they're how regular investors get the chance to own a piece of companies that were previously off-limits. IPOs matter because they can be exciting opportunities—but also risky, since new public companies are often unproven at that scale. For example, if TechStartup Inc. decides to "go public" through an IPO, you could buy shares of it on the stock market just like any other stock. The company raises money from these sales, and investors hope the stock price grows over time.