Going Public: What an IPO Is
An IPO is the day a private company starts selling shares to the public.
The idea
IPO stands for initial public offering — the first time a private company sells shares to the general public. Before that day, only founders, employees, and a few big early investors own pieces of it. The company works with investment banks to pick a starting price, called the offer price, and files paperwork with regulators explaining its business and its risks. But once trading actually opens, buyers and sellers set the price themselves, and nobody knows yet what the crowd will pay — which is why first-day prices can jump or drop a long way from the offer price. 🔔
Words to know
- IPO
- Initial public offering — the first time a company sells its shares to the public.
- Private company
- A company whose pieces are owned by a small group. You can't just go buy some.
- Public company
- A company whose shares anyone can buy or sell on a stock market.
- Offer price
- The price the company and its banks agree on for the shares before trading starts.
- Underwriter
- An investment bank that helps a company get ready to go public and helps sell the first shares.
Try it — no account needed
Four words you will hear whenever a company goes public. Match each one to what it means.
0 / 4 matched
In the full lesson
- 1Match the pairs
- 2Work out the number
- 3Make the call
Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.
Practice with real prices
Real market data, pretend money. Learn how investing actually works without risking a cent.
Start free