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Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Initial Public Offering

The first price for which a company offers to sell stock in itself when it moves from private ownership to public trade. More generally, it refers to the actual first sale of stock to the public. Small companies looking for a new source of financing offer most IPOs, but large companies who wish to be publicly traded can offer them as well. An IPO is generally a risky investment, because one does not know how much demand will exist for the stock after its initial offering; the risk comes from the uncertainty about the stock's resale value. See also: Publicly-traded company.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Initial public offering (IPO).

When a company reaches a certain stage in its growth, it may decide to issue stock, or go public, with an initial public offering (IPO). The goal may be to raise capital, to provide liquidity for the existing shareholders, or a number of other reasons.

Any company planning an IPO must register its offering with the Securities and Exchange Commission (SEC).

In most cases, the company works with an investment bank, which underwrites the offering. That means marketing the shares being offered to the public at a set price with the expectation of making a profit.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
The privatization program focuses on the transfer of ownership through IPOs, asset sales, and public-private partnerships.
Among these functions include the submission of LSI subscription forms, updating of LSI subscription like adding or reducing shares, prompts when there is an upcoming or on-going IPO or when there are other relevant updates.
In its continuous resolve to increase convenience for stock market investment, Central Depository Company of Pakistan Limited is taking regular initiatives to provide ease and efficiency for the subscription of shares offered through IPOs to general public.
The IPO of Sarwa Capital on the Egyptian Stock Exchange raised US$123.2m during Q4 2018.
Summary: Corporate IPOs led primary markets in 2018, contributing 56% to number of issuances and 62% of capital raised
Bildik & Yilmaz (2008) propose that the source of shares sold through the IPO affect investors' decisions whether to participate in the IPO.
"It is positive to see that IPO value increased year-over-year in Q3, especially when we have seen several entities across MENA delaying their plans for IPOs in 2018 due to various factors including (but not limited to) regulatory and global trade concerns and uncertain market conditions in a rising interest rate environment," Phil Gandier, MENA Transactions Leader at EY, said.
Gregory Hughes, MENA IPO leader at EY said: 'Although oil prices have increased, MENA countries are still feeling the impact of the significant drop in oil prices in recent years.
The UAE led the MENA IPO market in value, raising a total of $2.2 billion in capital, primarily contributed by the Emaar Development IPO at $1.3 billion-- the largest IPO in the region since 2014.
The renewed interest for IPOs in the region is in the wake of a record 2017 that witnessed 17 issues raising as much as $2.95 billion in capital.
Tadawul was the largest in terms of IPO volume, witnessing IPOs of three Real Estate Investment Trusts (REITs) (38 per cent of total IPO volume in Q4), raising $209 million.