What Is an IPO, and Should You Buy One? My Contrarian Take After 15 Years at The Fool.
IPOs get a lot of buzz, but they don't often pan out for investors.
An initial public offering (IPO) is the process through which a company transitions from being privately held to publicly traded on a stock exchange. During this process, a company files a detailed prospectus with the Securities and Exchange Commission (SEC) and conducts a roadshow to pitch the offering to potential investors. Once the IPO is complete, the company's stock is listed on an exchange and can be bought and sold by the public.
The IPO process is typically facilitated by investment banks acting as underwriters, and the listing price is determined based on investor demand shortly before the offering. After going public, the stock can be traded like any other publicly traded company.
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