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LSDefine
Simple English definitions for legal terms
IPO
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A quick definition of IPO:
An IPO is when a company sells its stock to the public for the first time. It's like when you sell something you made to your friends, but instead of friends, it's strangers who want to buy a part of the company. The company has to follow rules and get permission from the government before they can do this. Sometimes, if not enough people want to buy the stock, the company can stop selling it.
A more thorough explanation:
An IPO, or initial public offering, is the first time a company sells its stock to the public. It is a way for a company to raise money by selling ownership shares to investors.
- When Facebook went public in 2012, it raised $16 billion through its IPO.
- Uber went public in 2019, selling shares of its stock to the public for the first time.
These examples illustrate how companies use IPOs to raise money by selling shares of their stock to the public. Investors can buy these shares and become part owners of the company.