From the course: Finance and Accounting Tips

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What is an IPO?

What is an IPO?

From the course: Finance and Accounting Tips

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What is an IPO?

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- It used to be that initial public offerings, IPOs, created millionaires overnight. Now, with the high values of many high-tech start-up companies, IPOs are creating billionaires overnight. For example, Mark Zuckerberg, the Facebook founder, was worth over $19 billion the day after Facebook went public. So just what is an IPO? Well, my rule of thumb is if you want to know what something is, just say it slow. An initial public offering, an IPO, is an initial public offering. It's kind of what it says it is. It's the first offering to the public of shares or stock in a company. Microsoft, for example, went public on March 31st, 1986. The price for one share of stock on that day began at $21, at the end of that first day, the price had climbed as high as $35.50. By the way, if you'd purchased one share of stock on that day, today it would be worth over $19,000. Microsoft has split their shares nine times since 1986 in an effort to keep their stock price low. One share purchased then…

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