Question

social media company needs money to expand, so it decides to issue stock. the first-time sale of the company's stock directly to the public is called a

Answer 1

When a social media firm needs funds to expand, it decides to sell stock. An initial public offering is the first time a company's shares are sold directly to the public (IPO). Hence, the correct answer is IPO.

What is an initial public offering?

An initial public offering (IPO) or stock launch is a public sale in which a company's shares are offered to institutional and, in most cases, individual investors. One or more investment banks often underwrite an IPO, as well as arrange for the shares to be listed on one or more stock exchanges. A privately owned corporation becomes a public company through this procedure, referred to colloquially as floating or going public. Initial public offerings (IPOs) can be used to raise additional equity capital for firms, to monetize the assets of private shareholders such as company founders or private equity investors, and to make current holdings or future capital raising easier to trade by becoming publicly traded.

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