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An initial public offering (generally referred to by its initials IPO), 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.

Often the stock price will skyrocket on the day of the IPO (thus making initial investors wealthy).