What is an initial public offering?

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An initial public offering, also known as an IPO, constitutes the first initial sale of a corporation's common shares to public investors. The main objective of an IPO is to help advance the capital of the corporation. Even though IPOs have a positive effect on gaining capital, intense legal compliance and reporting requirements tend to come along with them as well. Initial public offering describes only the first public issuance of shares by a company. Any further public issuance of shares is called a Secondary Market Offering.

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