Initial Public Offering Definition
Initial Public Offering (IPO) means the first sale of stock by a corporation to the public. Companies issue stocks to receive additional capital for their expansion plans. The issuer involves an underwriting firm to assist with the IPO, to determine what type of security to issue, what is the proper price and time to bring it to market. The most complicated task is determining the best offering price, a high price does not attract investors, while a too low price causes loss for the company.