The statistic shows the number of initial public offerings worldwide between 1996 and the first half of 2013. In 2011, 1,225 IPOs were registered.
The IPO process
An IPO, the abbreviation of the term 'initial public offering’, is a stock market launch where shares of stock in a company are sold to the general public on a securities exchange for the first time.
Through the initial offering of its stock, the company ceases to be a private enterprise, whose stock is owned, exchanged and traded privately, and becomes a publicly traded company.
IPOs are made by different companies for a number of reasons. Smaller sized companies may seek a stock market debut in order to give them access to capital and cheaper credit so that they may raise the funds necessary for further expansion. Other companies that may already be of considerable size, however, may use an initial public offering to other ends. They may also understand the advantages of an improved and diversified equity base, but will no doubt also see the advantages that can be gained in the increased levels of public awareness that are part and parcel of undergoing an initial public offering.
Although IPOs have a number of advantages attributed to them and are often successful but, they can also be unsuccessful, even bad. The
best performing IPOs are generally those from companies whose stocks trade up on the first day, a good start is important. If the stock fails to take off, sits and stagnates, investors are likely to lose confidence in the company and the stock price can go into free fall.