What is an Initial Public Offering or IPO?
Answer:
An initial public offering (IPO) occurs when


a private company decides to raise capital by selling shares of stock to investors through a stock exchange such as NASDAQ or NYSE. 

Only this initial sale of stocks directly from the company is called an IPO.  You may hear about companies “going public”.  This is another way of saying they are issuing an IPO.

If the company decides to sell more stocks later (to raise more money) it is called a “seasoned equity offering”.  If an individual sells some of the stocks they own this is called a “secondary offering”.

Although selling shares through the stock market is a great way for a company to raise capital, it can also complicate the company’s reporting requirements and cause them to fall under heavier regulation.
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