define each term If you have read these 2 posts then you know what an IPO is 1 2 Again discussing here The full form of IPO is Initial Public Offering. You really got confused by hearing that the first IPO came in 1602. Yes, you heard it right, 1602. It was from the Dutch East India Company. So, what happens after the IPO? After IPO, the company has to decrease its ownership in the business and adding new minority shareholders to the company. It is also called going public. Why any businessman sell its ownership? Because the company needs money for expansion or some other purpose. You might think about why they don't approach banks to get the money? Because if they take a loan they have to repay it back and also have to pay interest on that money. Don't they have to return back to the shareholders? No, these minority shareholders of the company have become the part-owner of the company, which means if the company got profited they got benefited by the profit(dividend). Direct...