Market Basics
Initial Public Offering
The process of a private company becoming publicly traded by selling shares to the public.
Also called: IPO
What it means
An initial public offering, or IPO, is when a private company offers shares to public investors for the first time and begins trading on a stock exchange. After the IPO, the company becomes a public company and usually takes on more reporting requirements.
Why it matters
IPOs are common in market news, and they mark the transition from private ownership to public market ownership.