Initial Public Offering (IPO)

Market Mechanics

An IPO is the first time a company offers its shares for sale to the public on a stock exchange.

The price is set by the underwriting investment banks based on demand collected from institutional investors, and from the first trading day the stock trades freely. Early trading can be volatile, and the end of the lock-up period that restricts existing holders from selling can weigh on the price.

Related Terms

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