What does IPO mean?

IPO is the abbreviation of English Initial Public Offerings, which is defined as initial public offering in Chinese. It refers to the first time that an enterprise or company (joint stock limited company) publicly sells its shares to the public (initial public offering refers to the way in which a joint stock company publicly issues its shares to the public).

Usually, the shares of listed companies are sold through brokers or market makers according to the agreed terms in the prospectus or registration statement issued by the corresponding CSRC. Generally speaking, once the initial public listing is completed, the company can apply for listing on the stock exchange or quotation system. A limited liability company shall be changed into a joint stock limited company before applying for initial public offering.

Extended data:

Corresponding to the primary market, most public shares are underwritten by investment banking groups and enter the market. The bank buys its own account from the issuer at a certain discount price and then sells it at the agreed price. The preparation cost of public offering is high, and private placement can partially avoid such costs to some extent.

This phenomenon began in the United States in the late 1990s, when the United States was experiencing a bubble in the Internet stock market. The founder will set up a company with independent capital and raise funds through an initial public offering (IPO) during the bull market. Because investors believe that these companies have a chance to become Microsoft's second, their share prices usually rise in the initial stage of listing.

Many founders became millionaires overnight. Due to stock options, employees have also earned considerable income. In the United States, most shares raised through initial public offerings will be traded on the Nasdaq market. Companies in many Asian countries will raise funds to develop their business through similar methods.

References:

Initial public offering (IPO)- Baidu Encyclopedia