An initial public offering is the first offering of shares to the public by a privately or state owned company. IPOs are used by companies to raise new funds, or to achieve a listing on an exchange. The issuer normally offers the shares to the public through an underwriter who promotes the offering and usually guarantees to take the shares at a certain price to protect the issuer against adverse market movements. Also known as a flotation or going public.

See also: Offer for Sale, New Issue