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