Why do companies do IPOs?

Our opinions are always our own. An initial public offering (IPO) marks a private company's debut on a stock exchange. Companies do IPOs for the cash they bring and the prestige of going public. IPOs are often high risk, as the new stock's price can initially soar and then drop dramatically.

What is an IPO & how can I invest in one?

What Is an IPO, and How Can I Invest In One? An IPO, or initial public offering, marks the debut of a company’s stock on the public market. Learn more about how an IPO works, the process of going public, and how to invest in an IPO.

How have IPOs made entrepreneurs billionaires?

Large amounts of capital have been raised in recent years by small companies that went public. Initial public offerings (IPOs) have made instant billionaires of entrepreneurs such as Yahoo's Jerry Yang and Broadcast.com's Mark Cuban. These IPOs flooded the coffers of the companies with millions, if not billions, of dollars.

What are IPO terms?

You’ll want to understand these key IPO terms: Common stock. Units of ownership in a public company that typically entitle holders to vote on company matters and receive company dividends. When going public, a company offers shares of common stock for sale. Issue price.