What is an IPO?
An Initial Public Offering (IPO) is the process by which a private company offers its shares to the public for the first time.
The IPO Process
- File the prospectus: A detailed document about the company's finances and risks.
- Set the price: Underwriters determine a price range.
- Book building: Institutional investors indicate demand.
- Listing day: Shares begin trading on the exchange.
Risks of IPO Investing
IPOs can be exciting but risky. Prices can be volatile in the first days. Always read the prospectus carefully and consider the company's fundamentals.