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-traded entity. This allows the company to raise capital from a wider pool of investors for various purposes, such as funding growth, paying off debt, or increasing its public profile. Existing investors can also monetize their investments. The IPO process is often referred to as "going public" or "floating".
The IPO process involves several steps, typically starting with the selection of an investment bank to advise on the IPO and provide underwriting services. Underwriters help with assessing the value of shares and establishing a public market. Due diligence is conducted to ensure there are no surprises that could affect share pricing. A registration statement is filed with the Securities and Exchange Commission (SEC), including a prospectus that details the company's operations, financials, and risks. The company and underwriter determine the offer price and number of shares to be sold. After SEC approval, shares are issued and trading commences on a stock exchange like the New York Stock Exchange or Nasdaq. Recent IPOs include Jaguar Uranium Corp. and SpyGlass Pharma, Inc. Companies expected to IPO in 2026 include Databricks, OpenAI, and Anthropic.
