IPO, also known as Initial Public Offering is when a private company sells its shares and offers it to the public for the first time. This allows investors to buy shares early and if the firm expands, then they may benefit from the high share prices.
1. First Opportunity to Buy Shares: Investors have an opportunity to buy stakes directly from the company unlike other investors who trade via public market exchange. It can be exciting to be part of a company at such a ground level.
2. Potential High Returns: Early investment in a company’s stock can lead to big profits as business performance is reflected by a rise in the price of its share. IPOs, therefore, have the flexibility of earning huge returns if the investor invest in the IPO for long term and company keeps on generating consistent profits.
3. Early Investment Opportunity:Being a shareholder when the company goes public allows the investors to be part of the company’s progress from the time when they invest. For those who are sure about the company’s objectives and its perspectives, this may be rather enticing.
4. Market Perception:Generally, an IPO has the tendency of bringing more visibility or credibility to the business firm. The IPOs are crucial to the reputation and additional investments in a company.