Initial public offering (IPO)

An initial public offering (IPO) is the process by which a company goes public and sells shares of its stock to the general public for the first time. The process involves registering securities with the relevant regulatory authority and selling those securities to the public. The primary reasons a company may choose to go public and have an IPO are to raise capital to fund growth, provide liquidity to shareholders, and increase the company's public profile. Going public also allows the company and its shareholders to potentially cash in on the increased valuation that becoming a publicly traded company can bring.