Initial Public Offering (IPO)

[ih-nish-uh l] [puhb-lik] [aw-fer-ing]

A company’s first sale of stock to the public. The IPO is usually tendered, but not always, by those of young, smaller companies attempting to locate equity capital and a public market for their stock. An IPO may present considerable risk but also has the potential of significant profits for investors. Investment companies (closed end funds) generally include underwriting fees which represent a load which is then passed onto buyers.