What is an IPO?

An initial public offering (IPO) is the process through which a private company goes public by selling shares of its stock to the public for the first time. IPOs are a way for companies to raise capital by selling a portion of their ownership to the public.

The process of going public can be complex and involves a number of steps, including:

1. Hiring an investment bank to act as the underwriter for the IPO.

2. Preparing and filing a registration statement with the Securities and Exchange Commission (SEC), which includes detailed financial and operational information about the company.

3. Marketing the IPO to potential investors through a process called "roadshows."

4. Pricing the IPO and selling the shares to the public through the underwriter.

5. Allocating the shares to investors and listing the company's stock on a stock exchange.

After an IPO, the company's stock becomes publicly traded, and its shares can be bought and sold on the open market. The proceeds from the IPO go to the company, which can use the capital to fund operations, pay off debt, or invest in growth opportunities.