A company offers an initial public offering (IPO) when it decides that it needs some more capital to invest on becoming a better company. This IPO is the first offering of stock for that company to the public. (It may have offered stock to its employees before an IPO as an incentive for those employees and to make them feel like a part of the ownership.) As a publicly traded company, the leadership becomes beholden to those who own stock. Investors want to see the stock price rise, and they would love to get a dividend.
Continue reading here:
IPOs And Emotions Make For A Dangerous Investing Mix