What does IPO stand for?


Quick Answer

"IPO" is the acronym for an "initial public offering." It is a corporation's first sale of securities under the regulations that govern public companies. Another term for it is "going public" as the corporation seeks additional capital by offering the new securities on a public platform.

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Full Answer

Stringent requirements must be met before offering stock on a regulated public market. Several years' financial statements have to be audited by a major accounting firm. Any special financial arrangements between the corporation and its owners or managers have to be reviewed for propriety. The process of setting up an IPO is not completed quickly and can indicate a business with long-term plans. For investors, an IPO represents an opportunity to buy into a company that is in a potentially successful growth phase.

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