A company's first sale of
stock to the public.
Securities offered in an I.P.O. are often, but not always, those of young, small companies seeking outside
equity capital and a public market for their stock.
Investors purchasing stock in I.P.O.s generally must be prepared to accept very large
risks for the possibility of large gains. I.P.O.'s by investment companies (
closed-end funds ) usually contain
underwriting fees which represent a load to buyers.