Initial Public Offering (“IPO”)

An Initial Public Offering is the sale of shares of a privately owned company to the public for the first time. It is known as trading in the Primary Market. IPOs can be issued by companies seeking to raise capital as well as go public. The issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue, the best offering price, and the time to bring it to market. From an investor’s perspective, it is tough to predict the stock’s performance on debut in the Secondary Market.

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