In this new series, we demystify investing terms for beginners.
Previously, we looked at what a stock is. Now, let’s get to the definition of “IPO”.
So, what is an IPO?
An IPO (initial public offering) is a process whereby a private company offers its shares to the public for the very first time and becomes a listed company. Once it is listed, its shares are traded on the stock market.
(Interesting fact: Research shows that the Dutch conducted the first modern IPO by offering shares of the Dutch East India Company to the public in 1602.)
An IPO is offered on the primary market directly to investors, and once the company becomes listed, it is traded on the secondary market, which is known as a stock exchange. The only stock exchange in Singapore is the Singapore Exchange (SGX), which is also a public company.
Companies
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