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Initial Public Offering - IPO

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Initial Public Offering - IPO
The first sale of stock by a private company to the public. IPO's are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
    
In an IPO, the issuer obtains the assistance of an Underwriting firm, which helps it determine what type of Security to issue (common or preferred), the best offering price and the time to bring it to market.
    
Also referred to as a "public offering".
    
IPO's can be a risky investment. For the individual investor, it is tough to predict what the stock Will do on its initial day of trading and in the near Future because there is often little historical data with which to analyze the company. Also, most IPO's are of companies going through a transitory growth period, which are subject to additional uncertainty regarding their Future values.
    
In an IPO, the issuer may obtain the assistance of an Underwriting firm, which helps it determine what type of Security to issue (common or preferred), best offering price and time to bring it to market.
Posted by  Information Management Network LLC.
 
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