IPOs can have many advantages and bring a great deal of benefits to companies; a stock market launch can provide companies with the means to raise expansion capital, diversify their equity base, provide access to cheaper bank loans, and increase exposure to the public. The best performing IPOs are generally those companies whose stock price trades up on the first day. However, IPOs are not always favorable. If the stock sits and stagnates, investors can and are likely to lose confidence and the stock price goes into free fall resulting in a bad IPO.
China has recently emerged as a leading IPO market but the United States remains the leading country worldwide, by number of company IPOs. The largest IPO in the U.S. so far was that of Alibaba Group Holding in 2014, in which 21.77 billion U.S. dollars was raised.