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IPO (Initial Public Offering)

Glossary

An Initial Public Offering (IPO) is when a private company sells shares to the public for the first time, becoming publicly traded on a stock exchange.

Why Companies Go Public:

  • Raise Capital → Funds can be used for growth, expansion, or debt repayment.
  • Increase Brand Visibility → A public company gets more media and investor attention.
  • Allow Early Investors to Cash Out → Founders, venture capitalists, and early employees can sell their shares.

While IPOs can be lucrative, they also tend to be volatile, with some stocks surging post-IPO and others crashing after hype fades.

For example, Trump Media and Technology Group, $DJT, IPO'd in March of 2024. In the chart below, you can see just how volatile that first day of trading was with that first candle on the left. $DJT traded as high as $74.43 after its IPO, just to swing widely, up and down, before settling to a consistent price range around $30 per share.