By Staff Reporters
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DEFINITION: An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors An IPO is typically underwritten by one or more investment banks who also arrange for the shares to be listed on one or more stock exchanges. Through this process, colloquially known as floating, or going public, a privately held company is transformed into a public company. Initial public offerings can be used to raise new equity capital for companies, to monetize the investments of private shareholders such as company founders or private equity investors, and to enable easy trading of existing holdings or future capital raising by becoming publicly traded.
CITE: https://www.r2library.com/Resource
After the IPO, shares are traded freely in the open market at what is known as the free float. Stock exchanges stipulate a minimum free float both in absolute terms (the total value as determined by the share price multiplied by the number of shares sold to the public) and as a proportion of the total share capital (i.e., the number of shares sold to the public divided by the total shares outstanding). Although IPO offers many benefits, there are also significant costs involved, chiefly those associated with the process such as banking and legal fees, and the ongoing requirement to disclose important and sometimes sensitive information.
Cite: Wikipedia
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Now, the NYSE is the world’s largest stock exchange, and for good reason. From thrilling new entries into the public market to a relentless commitment to transformative tech, the NYSE is constantly upping their game.
Related: https://medicalexecutivepost.com/2023/09/19/ipos-more-caution-ahead/
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Filed under: "Ask-an-Advisor", Accounting, CMP Program, Financial Planning, Funding Basics, Health Economics, Investing | Tagged: free float, Initial Public Offering, investment bankers, IPO, IPOs, NASDAQ, NYSE, Private Equity, public company, secondary offering, stock exchanges | Leave a comment »














