The social media platform that’s become the all the rage among young people is making its big stock-market splash through its Snapchat IPO.
IPOs are a monumental moment in a company’s history because suddenly, anyone, anywhere can purchase stock in the company through a broker.
An IPO marks the first time equity or shares are opened to the general public. While companies often raise capital by issuing debt or equity from other private sources, an IPO opens them up to a much broader audience of potential investors.
A whole new world
When a company goes public, it enters the major leagues of companies and is subjected to much stricter rules and regulations. Having thousands upon thousands of shareholders means that you’re constantly under the microscope from investors and government agencies alike. A publicly traded company is bound by the federal government’s rules to report its financial information every quarter, and it must appoint a board of directors.
Going public also means that investors can freely purchase and sell stock in the company, making an investment in the company extremely liquid. If a company’s stock is in high demand…