Initial Public Offering (IPO)

The process by which a private company first offers its shares to the public on a stock exchange. IPOs are underwritten by investment banks who set the offering price, allocate shares to institutional clients, and manage the listing. The first-day "pop" that many IPOs experience has led to a cottage industry of IPO flipping, though retail investors rarely get access to shares at the offering price. Notable IPOs include Google (2004), Facebook (2012), and Saudi Aramco (2019), the largest IPO in history.