IPO
IPO refers to initial public offering. This is when the
shares of a newly listed company are offered to public investors for the first
time. During the dot com boom, there were a large number of technology IPO’s.
Companies listed on the stock exchange, often raising billions of dollars from
investors.
When the dot com boom was over, the number of technology
related IPO’s dropped considerably. But many related IPO’s are still successful
today. At the time of writing, Google had just listed in one of the biggest IPO
in years.
The people who make money out of an IPO are generally early
investors, such as venture capitalists. They have bought into the company well
before the IPO and are now selling at a higher price. They might also retain
some of their shares for a later sale. Once the IPO is completed and the shares
are listed, they can easily be sold through the stock public exchange.
Investors who buy shares at the IPO also hope to make money. They often keep
the shares for some time, before selling. The shares are bought during the IPO
in the hope that the share price will go up post IPO and the investor will make
money. This is not always the case.
