An IPO is the abbreviation for “Initial Public Offering”.
It can also be known as “Initial Price Offering”
An Initial Price Offering (IPO) is where a company raises capital by offering existing or new shares in a company to the public for the first time (also known as a company Float) or otherwise known as “Going Public”.
An IPO allows a privately owned company to expand from a private company, to become listed on a stock exchange such as the Australian Stock Exchange (ASX).
To reinforce this: The main objective of taking a company to an IPO is to raise capital to expand its operations by offering existing shares or the offering of new shares in its company to the public for the first time.
By investing in an IPO, it will allow investors to purchase shares at a pre-set IPO price before the company begins trading on a stock exchange with the hope that the IPO shares that are on offer will increase in value in that company over time.
It’s important to note that there may be a set minimum or maximum amount of IPO shares that may be offered and purchased with any IPO offer.
There are many myths that many IPO offers are initially only offered to existing “High Net Clients” of participating affiliated investment firms, this is incorrect.
All IPOs are open to the general public despite the selective marketing efforts of the underwriting brokerage firm that is offering the IPO.