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Business Basics: IPO

March 26th, 2014

 

IPO stands for initial public offering, and it is the first stage in a company’s path towards a public offering.  In an initial public offering, shares of a company are made available and sold to public investors for the first time. This marks the transition from the company being privately held to becoming a public company, and utilizing a significant source of capital. By using an initial public offering, a company can begin to return financial investments to early investors, and become publicly traded companies.

With high amount of initial public offerings in 2014, many have outperformed analyst expectations. The large boost in initial public offerings last year and into this year can be attributed to the JOBS Act, which allows crowdfunding to raise money. This helps remove obstacles for smaller companies to go public.

 

– Information compiled by Katii Sheffield