What is an Initial Public Offering (IPO)?

The initial public offering (IPO) refers to the sale of shares to investors for the first time. This offering offers several advantages for the company, investors, and underwriters (that is, the investment bankers making the initial public offering). The IPO occurs first in the primary market, to later be commercialized in the secondary market.

The companies that immerse themselves in the world of the Initial Public Offering are primarily private companies. But of course, by taking this action, these companies become public since it is allowing the public to participate in their profits and in their growth.

Why do companies choose the IPO?

The cause of this decision is basically to expand the business. Many companies aspire to be public companies, in order to obtain another source of fundraising for operations.

Another cause is to increase your Inventory and maintain its operations. Companies want to keep growing, their main objective is to create profits, and the IPO is a good option to start doing so.

The time to do an initial public offering is when the company is having a good time. When the need to grow and increase equity capital exceeds its borrowing capacity, when there is an attractive annual growth rate, or when it has a growth market, in addition to a sustainable competitive advantage over time.

How does the initial public offering work?

It depends on the type of company. Small companies use the IPO to raise capital for growth and expansion, while private companies use it to grow and go public. the bag.

In addition, IPO has many advantages, such as: raising capital for growth, collection of benefits, lucrative fees, flipping (quick and easy way to profit from IPO), IPO.

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