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An IPO, which is short for initial public offering, is the sale of shares of stock in a company to the public for the first time. This subjects a private company to requirements of public disclosure and other regulations.

After expiration of a time period, usually called the "lock-out period," insiders in the company are then able to sell their own shares. For media-promoted companies like Facebook, insiders usually reap an enormous profit for themselves months or years after the IPO.