INITIAL PUBLIC OFFERING
An Initial Public Offering, also known as an IPO, is the process that a private corporation takes to become a public corporation by listing its shares on a stock exchange. The simple difference between a private corporation and public corporation is the number of shareholders allowed by law, and the ease with which one can buy and sell the shares. Public corporations are valued on a daily basis based on the trading of stock, while the valuation of private corporations is more opaque. Public corporations are also subject to more stringent financial disclosure rules, such as publishing financial statements quarterly, as well as issuing formal press releases of any material change to the business. Private corporations are only required to file financial statements annually, and there is no requirement to disclose these documents to the public.