Initial public offering

An initial public offering or IPO is the initial sale of the common shares
of a corporation to the public. It represents a primary market.

The sale of stock is regulated by authorities of financial supervision and
where relevant by a stock exchange. It is usually a requirement that
disclosure be made of the financial situation and prospects of a company be
made to prospective investors.

In the United States, during the dot-com bubble of the late 1990s, many
venture capital driven companies were started, and seeking to cash in on the
bull market, quickly offered IPOs. Usually, the stock price spiraled upwards
as soon as a company went public, as investors sought to get in at the
ground-level of the next potential Microsoft.

Initial founders could often become overnight millionares, and due to
generous to stock options, employees could make a great deal of money as
well. The majority of IPOs could be found on the Nasdaq stock exchange,
which is laden with companies related to computer and information technology.

This phenomenon was not limited to U.S. In Japan, for example, a similar
situation occurred. Some companies were operated in a similar way in that
their only goal was to have an IPO. Some stock markets were born for those
companies, such as Nasdaq Japan.

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