What is an IPO?

In Back to School Week, we're explaining some of the most common investment acronyms

Holly Black 25 August, 2021 | 12:44PM
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Holly Black: Welcome to the Morningstar Investment ABC. We're going to go through some of the most common acronyms in the investment world, which sounds really confusing and off-putting, but aren't as bad as you think and the aim is to prove that investing is as easy as ABC.

Isaac Shaftain: Hello, my name is Isaac Shaftain, and today's word is IPO. I is for Initials, P is for Public and O is for Offering. 

Black: Thanks very much Isaac. So, yes, our words today is IPO, Initial Public Offering. And this is a word you'll hear when a company is listing on the stock exchange for the first time. So, its moving from private ownership to public ownership, which is when you as an individual can get involved and start buying and selling shares. Why is it called an Initial Public Offering, well, initial because it's the first time that shares are being offered. P to the public and O I just said it, the shares are being offered. So, that's IPO.

Shaftain: IPO.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Holly Black  is Senior Editor, Morningstar.co.uk