What is an IPO?

When a private company wants to raise money, and/or wants to give the owners and employees a way to benefit more directly from the value that has been created in the business, an option they have is to do an 'initial public offering' which is abbreviated to its acronym, IPO. An IPO is when the shares of the company are first being offered for sale to the public at large --although the average regular investor (also called a 'retail investor') generally needs to wait until after the IPO, when the company is publicly traded on the stock exchange, to be able to buy the stock.

A company that wants to 'go public,' usually needs a professional called an 'investment banker' to oversee the process, and so, my next blog will explain the basics of what an investment banker is.

In the meantime, do you remember any notable IPO's? A quick Google search tells me that recent IPO was Sweetgreens, the salad restaurant. When did your favorite company go public? Let me know in the comments! And as always, thanks for reading this.

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