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Finance Dictionary and Glossary of Investment Terms
Initial public offering (IPO)
Definition 1.
A company's first sale of stock to the public. Securities offered in an IPO are often, but not always, those of young, small companies seeking outside equity capital and a public market for their stock. Investors purchasing stock in IPOs generally must be prepared to accept considerable risks for the possibility of large gains. IPOs by investment companies (closed-end funds) usually include underwriting fees that represent a load to buyers.
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Definition 2.
A company's first sale of stock to the public. Companies making an IPO are seeking outside equity capital and a public market for their stock. (See syndicate, underwriter)
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