IPO is an acronym for Initial Public Offering. This is a term used in the stock market to refer to the process by which a private company transforms into a public corporation and its shares are offered to the general public for the first time.
Prior to an IPO, a company is considered private with a limited number of shareholders. However, once a company goes through an IPO, it is allowed to sell its shares on a stock exchange to raise capital and it becomes a public entity. This process is often conducted by companies that are seeking to raise funds for growth and expansion.
It is important to note that after an IPO, the company must meet stricter regulations and financial reporting standards since they have to be accountable to its public shareholders.
