What is an IPO — IPO Explained: What Happens When a Company Goes Public

A private company files a registration statement with the SEC, typically on Form S-1. It then sells shares to public investors for the first time. That transaction, an initial public offering, turns the firm into a reporting company. It must then file quarterly and annual financial statements with the agency. The SEC's own guidance walks through every step. Federal law controls the road to a first trade. A company may not lawfully offer or sell shares unless the deal is registered or an exemption applies. Underwriters, a prospectus and a negotiated price sit in between. Each one shapes what investors finally see. For related coverage, see How Tariffs Work And Who Actually Pays Them. What Is an IPO? An IPO is the first sale of a company's shares to public investors. The SEC describes it as the first time a company offers its shares of capital stock to the general public.

This excerpt comes from the named source. Read the original for the full reporting.