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Initial Public OfferingsAn initial public offering, or IPO, is the process of a private company becoming public. In an IPO, a company puts shares of the company on the stock market for the public to purchase.
IPOs often have all the pomp and circumstance of a graduation ceremony, as they are one of the biggest milestones a company can achieve. From Apple in 1980 to Reddit in 2024, every public company has gone through an IPO at some point.
To begin the process, a company hires investment bankers (who earn roughly 7% of the IPO's gross proceeds) to help set the organization's target valuation range—an estimate of how much the company is worth—and schedule an IPO date. From there, the bankers market the IPO to hedge funds and other large potential investors.
Transitioning from a private to a public company allows an organization to more easily raise a significant amount of capital. This helps the company expand.Explore Initial Public Offerings
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Three AI startup founders broke the record for the youngest self-made billionaire previously set by Mark ZuckerbergMark Zuckerberg became the youngest self-made billionaire in 2006 at 23 years old when Facebook held its initial public offering. In January of 2026, three AI startup founders—Brendan Foody, Adarsh Hiremath, and Surya Midha—broke Zuckerberg's record and became billionaires at 22 years old. GOBankingRatesPets.com is one of the most emblematic dot-com companiesPets.com—an e-commerce pet store webpage—is a prime example of dot-com companies burning through investments. Despite being a popular and well-known brand, the company struggled to generate enough revenue to become profitable. After raising approximately $82.5M in its February 2000 initial public offering, Pets.com filed for bankruptcy in November of that same year. NPRThe 'big bang' of the dot-com era: Netscape's stock price doubled on the day of its initial public offeringThe company behind the browser that revolutionized search went public on August 9, 1995. Just before the IPO, the company increased its initial opening price from $14 to $28. On the day the company went public, shares traded as high as $71 before closing at $58.25. The company's market capitalization exceeded $2B. The eye-popping IPO is largely considered the beginning of the dot-com bubble. Internet History PodcastPeloton's founder once said the company 'sells happiness' before a disappointing initial public offeringAhead of the company's IPO, Peloton founder John Foley told investors that "on the most basic level, Peloton sells happiness." However, the inspirational sentiment didn't stick with investors—the company closed the day of its IPO with stocks trading down 11% from the IPO price. (Some users may experience a paywall.) The Washington PostNike went public in 1980, and the first share sold at $22Nike stock plummeted in the four years that followed the company’s initial public offering (IPO). The company’s deal with Michael Jordan in 1984 ultimately revived investor confidence. NasdaqCompanies pay multiple fees as part of the IPO processWhen a company decides to approach IPO, it typically hires investment bankers—who earn about 7% of the IPO’s gross proceeds—to help set the organization’s target valuation range and schedule an IPO date. But that isn't the only fee associated with the IPO process. PwCAn S-1 reveals financial and other details to the public, often for the first time, when filing for an IPOTo file for an IPO, a company must file a registration form called an S-1 or prospectus with the US Securities and Exchange Commission. S-1s detail a company's current business model, competitive landscape, and other financial information. InvestopediaWeWork filed its first S-1 in 2019When WeWork prepared to file for its initial public offering in 2019, its S-1 revealed its poor financial state to the public. SECThe world’s first publicly traded company was the United East India Co.In an effort to best Spain and gain access to valuable trade in Asia, the Dutch Republic launched the VOC, or the United East India Co. The company held an initial public offering in 1602, allowing “subscribers” to choose how much they wanted to invest in the new venture. It was open to all residents of the republic, making this the first opportunity for retail investors in the world. BritannicaAn initial public offering is how a private company becomes publicThis milestone requires plenty of preparation, starting with the SEC's S-1 registration, revealing key details about the company's finances and strategy. Investment bankers set valuations, secure long-term investors, and finalize share pricing before the public launch. IPOs provide companies with significant capital, but also demand transparency and invite public scrutiny. 1440Initial public offering (IPO) is the term for when a company goes publicWhen a company completes its IPO, it's no longer a privately owned organization. Anyone can invest in the company by buying its shares on the stock market—opening up ownership of the business to the general public. NerdWalletRide along on one coffee company’s journey through the stock marketFrom going public with an initial public offering, to struggling with how negative news coverage impacts a stock’s value, this video lets you put yourself in the shoes of a newly public company. This makes learning about the inner workings of the stock market much easier. TED-Ed
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