Initial Public Offering (IPO)
When a private company first sells shares to the public market.
Detailed Description
Initial Public Offering (IPO)
What is the primary purpose of an IPO?
The primary purpose of an IPO is to raise funds for the company, which can be used for expansion, paying off debt, or investing in research and development.
Who are the key players involved in the IPO process?
The key players include the company going public, investment banks as underwriters, legal advisors, auditors, and regulatory bodies.
What are some risks associated with IPOs?
Risks include high costs, increased scrutiny, market volatility affecting stock prices, and potential loss of control for the company's founders.
What regulatory requirements must companies meet for an IPO in the U.S.?
Companies must file a registration statement with the SEC, including detailed financials and comply with the Sarbanes-Oxley Act.
Can you give an example of a notable IPO?
One notable IPO is Google's in 2004, which raised $1.67 billion and valued the company at $23 billion.