Glossary · from the DESK dictionary
Initial Public Offering (IPO)
The first sale of a company's shares to the public via a stock exchange.
In plain words
The moment a private company becomes tradable on the stock market for the first time.
In more detail
An IPO is usually led by investment banks that set the offer price and place shares with institutional and retail investors. After the first day of trading, the open market determines the price.
Example
A tech company goes public with an offer price of $20 per share.
What it means for traders
A major event for growth companies raising capital, and a potential entry point for investors.
Common pitfalls
IPO stocks are often volatile and can fall well below the offer price after initial hype fades.
Related terms
Additional Paid-In Capital · Aftermarket (Post-IPO) · Agreement Among Underwriters (AAU) · Share Issuance · Allotment · Alternative Investment Market (AIM) · Beauty Contest · Book Building · Bookbuilding Range · Common Stock · Cooling-Off Period · Dilution · Direct Listing · Direct Public Offering (DPO) · Draft Prospectus · Dutch Auction · Equity Capital Market (ECM) · Exit Strategy · First-Day Pop · Follow-On Offering · Form S-1 · Going Public · Grey Market · Green Shoe Option · Gun Jumping · Hot Issue Market · IPO Pop · Primary Markets · Red Herring · Reverse Leveraged Buyout (Reverse LBO) · Stag · Underwriting
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.