What is an IPO?

By: Ryan Tao

An Initial Public Offering, or IPO, is the first time a private company sells shares of itself to the general public. Before an IPO, a company is privately owned, usually by its founders, early employees, and investors like venture capital firms. These owners cannot easily sell their shares because the company is not listed on a stock exchange. An IPO changes that. It lets anyone buy a piece of the company on an exchange such as the Nasdaq or the New York Stock Exchange.

How an IPO Works

When a company decides to go public, it hires investment banks called underwriters to manage the process. The company files paperwork with regulators (in the United States this is an S-1 filing with the Securities and Exchange Commission) that explains its business and finances. The underwriters then help set a price per share and find investors. On the day of the IPO, the shares begin trading and the price can rise or fall based on demand. Companies go public mainly to raise money. The cash from selling shares can fund growth, pay off debt, or invest in new projects. An IPO also lets early investors and employees cash out some of their holdings, and it raises the company's public profile. The trade-off is that public companies face strict reporting rules and pressure from shareholders to perform well every quarter.

1. SpaceX (2026)

SpaceX, the rocket company founded by Elon Musk, went public in June 2026 and became the largest IPO in history. It raised roughly $75 billion in gross proceeds, far above the previous record set by Saudi Aramco in 2019 (about $25.6 billion). The offering valued SpaceX at around $1.75 trillion, putting it among the most valuable companies ever to go public.

2. Cerebras Systems (2026)

Cerebras, an artificial intelligence chipmaker, listed on the Nasdaq under the ticker CBRS in 2026. It priced its shares at $185 and raised about $5.6 billion. Strong demand for AI stocks pushed the price up 68% on its first full day of trading, showing how excitement around a sector can drive an IPO's early performance.

3. Fervo Energy (2026)

Fervo Energy, a geothermal power company based in Texas, raised about $1.89 billion in its 2026 IPO. This made it the largest renewable energy IPO ever. Fervo shows that IPOs are not limited to technology firms; companies across many industries use them to fund their growth.

An IPO is a major milestone that turns a private company into a publicly traded one. It raises money for the business and gives the public a chance to own a share of it. In exchange for that capital, the company accepts new obligations, from regular financial disclosure to constant scrutiny from shareholders. For everyday investors, an IPO is often the first chance to buy into a company's growth story from its earliest days on the market.