Page 23 - Initial Public Offering - An Introduction to IPO on Wall Street

All of the above definitions provide additional insight into the IPO process. The definition by
My Accounting Course does the exact same by stating the medium through which companies
go public. It does this in the following definition of an IPO:

“Initial public offering (IPO) is the initial sale of a company’s shares to institutional
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investors, who sell them to the public through a securities exchange .”
As mentioned above, all of the above definitions add something to the meaning of an IPO. If
I was to combine all of these definitions taking only the unique part from each, the definition
of an IPO would read something like this:
“The first sale of a new, young, company or an old company’s stock to the public through
the process of offering them shares of a privately owned corporation in a new stock issuance.
An IPO opens out share ownership to the wider market by allowing companies looking for
a new source of financing to list a certain number of shares on a stock exchange in order to
raise investment capital. The shares are sold to institutional investors, who sell them to the
public through a securities exchange.”

This definition of an IPO can be used as a reference point to understand the IPO process detailed
in this book. However, the best way to understand an IPO is through a real-life example. This
is exactly what is used to get readers started with Initial Public Offering (IPO).

6 My Accounting Course. What is an Initial Public Offering (IPO)? Retrieved from
https://www.myaccountingcourse.com/accounting-dictionary/initial-public-offering

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