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Individual Stocks

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How do companies use an initial public offering to help support their continued growth?

An IPO is a way in which a private company raises capital in order to fuel further expansion and investment. Typically, a private company may need more capital than what its current business generates in order to expand its market imprint, product offering, innovation, manufacturing, information systems, or a combination of all of these. Company founders may desire a liquidity event in order to cash out of the company. By making an offer for the sale of equity (shares), the company can quickly raise capital needed and continue to generate or improve its profitability over time.



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