An initial public offering (IPO) is the first sale of stock by a private company to the public. With an IPO, a company works with an underwriting firm to determine the type of security, offering price, and timing to bring the stock to market. While IPOs provide capital for companies to expand, they can be risky for individual investors due to lack of historical performance data and uncertainty around young companies' future growth.

1. Initial Public Offering - IPO
What Does Initial Public Offering - IPO Mean?
The first sale of stock by a private company to the public. IPOs are often issued by smaller,
younger companies seeking the capital to expand, but can also be done by large privately owned
companies looking to become publicly traded.
In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine
what type of security to issue (common or preferred), the best offering price and the time to bring
it to market.
Also referred to as a "public offering".
Investopedia explains Initial Public Offering - IPO
IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock
will do on its initial day of trading and in the near future because there is often little historical data
with which to analyze the company. Also, most IPOs are of companies going through a transitory
growth period, which are subject to additional uncertainty regarding their future values.