Initial Public Offering; the first sale of a company's shares to the general public, transforming it from a private to a publicly-traded company. This process raises capital for the company while allowing early investors to sell their stakes.
Term emerged in the 1960s as the process of 'going public' became more standardized and regulated. Previously called 'new issues' or 'public offerings,' the 'initial' designation emphasized this as the first public sale of shares.
IPOs are often terrible investments for individual buyers! The average IPO underperforms the market in its first year because institutional investors get the good deals at the offering price, while retail investors buy after the 'pop'—essentially paying a premium for the excitement of owning something new.
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