Stock Market Basics Chapter 3. IPOs
So after a six months of long break, I am back! I have talked about the reason behind my absence in another blog, which you can read here . But now let's talk about where we left the series, The IPOs. So, as I said in the previous chapter, the IPO is short for Initial Public Offering. It is when a company decides to go public for the first time. Today we'll see the reasons companies go public and the advantages of going public and how it's done. Reasons Companies go Public. Now there are three main reasons why companies decide to go public: To raise funds to meet CAPEX. As we know, CAPEX stands for Capital Expenditure. It is the expense evaluated by the company for long term planning. Many companies go public so they could get the funding for these expenditures. To avoid debt. To meet this CAPEX, many companies take a loan from banks. But a loan means you have to return the money. And if an entrepreneur is already in debt, they try to see other ways to raise funding for