An Initial Public Offering (IPO) is the process by which a private company offers shares to the public for the first time, transforming it into a publicly-owned entity. This transition, often called "going public", allows the company to raise capital from a wide range of investors to fund growth, pay off debt, increase its public profile, or allow early investors and company insiders to cash out some of their holdings. The shares are then listed on a stock exchange, enabling them to be traded freely in the open market.
The IPO process involves several key steps, including selecting an underwriter, usually an investment bank, to assess the company's value, market the offering, and ensure regulatory compliance. The company must also disclose detailed information about its business and finances in a prospectus. Recent trends in the IPO market show a recovery after a slowdown, with increased investor confidence and a focus on higher-quality offerings. Several high-profile companies, like SpaceX, Databricks, and Discord, are expected to IPO in 2026. However, factors such as market volatility, geopolitical tensions, and economic stability can significantly impact IPO activity.
