What is an Initial Public Offering (IPO)?

An Initial Public Offering (IPO) is when a company offers its shares to the public for the first time.

How it works:

• Shares are sold to the public through an underwriter
• The underwriter determines the offering price
• Once completed, the stock begins trading on a public exchange

Important:

• The IPO price is set before the stock begins trading
• After listing, the stock trades in the secondary market, where prices may change based on supply and demand