Chapter 1 of 8
What is an IPO?
IPO Label · · About 1 minute to read
It is the first time a company lets ordinary people buy a small piece of it.
A company belongs to the people who built it. When it wants money to grow, it can sell small pieces of itself.
Those pieces are called shares. The first time a company sells them to everybody is called an IPO.
New word
IPO
Initial Public Offering. The first time a company offers its shares to the public.
- The company
- People who bought a piece
The company says how many shares it will sell and for how many days people can ask for them. That window is usually three days.
After those days the shares start trading on the stock exchange, and anybody can buy or sell them.
Remember
Owning a share is not the same as lending money. Nobody has to pay you back. What your piece is worth can go up, and it can go down.