Initial Public Offering

Term Main definition
Initial Public Offering

A corporation's first offer and sale of stock to the public effected pursuant to a registration statement (and prospectus) filed with and declared effective by the SEC under the Securities Act. Typically, the IPO is underwritten by an investment banking firm (underwrite), with the shares listed or quoted on a national securities exchange (such as the New York Stock Exchange) or stock quotation system (such as the NASDAQ Stock Market). An IPO can provide a very fortunate and deserving company a substantial amount of new investment capital, liquidity for existing stockholders and improved access to the public capital markets.