An initial public offering is the moment a private company sells shares to the general public for the first time. The company raises capital it does not have to repay, and in exchange accepts the obligations of being publicly listed: audited accounts, regular disclosure and public scrutiny of its performance.
Key takeaways
- Money raised in an IPO goes to the company when new shares are issued; if existing owners sell their shares, it goes to them.
- Pricing an IPO is a judgement, not a calculation — early trading often reprices it.
- Listing is the beginning of a disclosure obligation, not the end of a fundraising.
