An IPO (initial public offering) is when a private company sells shares to the public for the first time. It's a milestone that lets the company raise capital from investors, gives early backers a path to sell, and lists the stock on a stock exchange for everyday trading.

How an IPO works

The company works with banks to set a price range, file regulatory documents, and market the offering to institutional and sometimes retail investors. On listing day, shares begin trading on the open market, where prices can move sharply as demand unfolds.

Before the IPO, only private investors (venture capital, employees with stock options) could own shares. Afterward, anyone with a broker or investment app can buy on the secondary market.

IPO risks and rewards

IPOs attract attention, but they're volatile. First-day pops and later pullbacks both happen. Long-term performance depends on the company's fundamentals, not launch-day hype. Read the prospectus and understand lock-up periods that restrict insiders from selling immediately.

IPOs and bunq

Once a company lists, you can often buy its shares through bunq Stocks like any other public stock, subject to availability in your market. Build a diversified portfolio rather than betting everything on newly listed names.

Frequently asked questions

Can anyone buy shares at the IPO price?

Often institutional investors get the largest allocations. Retail access varies by offering and platform.

Is buying on IPO day the same as participating in the IPO?

Buying on the first trading day is secondary market trading, you're buying from other investors, not directly from the company.

Why do companies go public?

To raise growth capital, increase visibility, provide liquidity for early shareholders, and use stock as currency for acquisitions or employee compensation.