Initial Public Offering

The first offering of a companys shares to the public known in the UK as a flotation. IPO was originally an American term but is now used across all world markets. The shares offered may be existing ones held privately, or the company may issue new shares to offer to the public. Companies choose to offer shares to the public to raise new capital for the company; to widen the shareholder base of the company; to give the shareholders a liquid market in which to trade their shares; achieve the publicity that a public listing brings. Companies might choose to list on the market by a private placing of shares to institutions rather than a public offering. There have been several online flotations sometimes referred to as EPOs (Electronic Public Offerings).