Stocks
IPO (Initial Public Offering)
The first sale of a private company's shares to the public, after which the stock trades on an exchange.
Example
When a company like Airbnb or Rivian "goes public," it sells shares to public investors for the first time through an IPO, after which the stock begins trading on an exchange.
Common Misconception
IPO "pop" headlines can create the impression that buying IPO shares is an easy win — in reality, many IPOs underperform the broader market in the months and years after listing.
Why It Matters
IPO shares are often volatile and thinly traded in their first weeks, which is worth knowing before treating a newly public stock like an established blue chip.