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What Is IPO?

Definition and plain-English explanation of "IPO"

IPO — Basics illustration

An Initial Public Offering (IPO) is when a private company first sells its shares to the public on a stock exchange. IPOs allow companies to raise capital from public investors and give early investors and employees a way to cash out. Famous IPOs include Facebook (2012), Uber (2019), and Airbnb (2020). IPO stocks can be volatile in their first few months of trading.

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