What is an Initial Public Offering (IPO)?

Written by Bode
Updated 3 years ago

IPO stands for Initial Public Offering. It’s when a company first sells its stock to the general public. In an IPO, a stock begins trading on a stock exchange such as the Nigerian Stock Exchange (NSE), New York Stock Exchange (NYSE) and the NASDAQ. 

Companies go public to raise money for a variety of reasons:

  • To raise money to hire more people and build bigger
  • To avoid taking on debt
  • To enable early investors and employees to sell their stakes
  • To have the marketing benefits and prestige of being traded on a stock exchange
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