An initial public offering, which is abbreviated as IPO, also known as a stock launch, is a public offering in which shares of a company are offered to institutional and, in most cases, retail (individual) investors. One or more investment banks generally underwrite an IPO, and they also arrange for the shares to be listed on one or more stock exchanges.
IPOs are generally considered to be an attractive investment opportunity for investors due to the underlying belief of buying low and selling high. It is commonly believed by many that stock prices increase after the IPO is issued.
During the IPO, the company shares are sold to the public and any investor can directly buy those shares and become a valid shareholder in the company.
