2.2 INITIAL PUBLIC OFFERINGS

2.2.1 Product Description

Initial public offerings (IPOs) are a product for privately owned companies aiming to list their shares on a public stock market (i.e., in an exchange). In an IPO, new and/or existing shares are offered to institutional investors, retail investors and to the company's employees. A listing enables the company to attract capital and realize its growth ambitions, while providing liquidity for its shareholders. For example, a private equity firm may have acquired a company via a leveraged buy-out (LBO). After years of partially repaying the debt, the private equity firm may decide to crystallize its investment by going public. Another example would be a private company's founders selling to the market part of their holdings to diversify their wealth. A third example would ....going public” process.