Swooning Over Bumble’s IPO – But What Exactly Is An Initial Public Offering?
Bumble raised US$2.15 billion in an initial public offering, or IPO, late on Feb. 10, just in time for Valentine’s Day. Investors swooned over the women-go-first dating app, buying more shares and at a higher price than initially expected, valuing the company at $8.3 billion.
But what exactly is an IPO?
As a finance professor, I believe understanding IPOs are an important part of knowing how markets work. More interesting to me, however, is how a new type of IPO is growing in popularity – including among the Redditors who are upending financial markets – and allowing more investors than ever to buy into the “hype” when a company goes public.
Why companies go public
Companies use IPOs – known as “going public” – to access the deep pockets of the U.S. stock market. At the end of 2020, the ...