what is an ipo 
an initial public offering ipo is the method of a private company offering its shares to the public for the first time and becoming a publicly traded company this event marks the transition from a privately held entity to a publicly listed company on a stock exchange the primary purpose of an ipo is to raise capital from public investors to fund further growth pay off debt or give liquidity to early investors and company founders the ipo involves several steps including selecting investment banks to underwrite the offering preparing regulatory filings with the u s securities and exchange commission setting an initial price for the shares and marketing the shares to potential investors on the ipo date the company s shares are listed on a stock exchange and public trading begins allowing any investor to buy and sell the stock 