What is the different between IPO and share?

Answer 1

The first thing you need to understand is what each item is. So we'll first define IPO.

IPO is an initial public offering which is the FIRST time that a stock is offered for sale by a private company to the public. Typically, these stocks are issued by a small or new company who are looking for additional monies to help them expand their businesses, although they are occasionally done by a larger company that is currently owned by a small group (private company) and are seeking more capital so they become 'publicly traded' companies.

Shares are the individual 'units' that are held of a stock, mutual fund, limited partnership or real estate investment trust. Because it has become so common, oftentimes rather than saying an investor owns 'stock' in a company we say they have 'shares' in a company.

IPO's are stocks and therefore once you purchase 'unit's' of the IPO you then own shares in the company much as you would any other company, once they are brought to the market.

It is important to understand that as with any stock there are inherent risks to any investment in any instrument, though IPO's are more risky than established shares as it is impossible to determine how an IPO will do on the first day it is traded since there is little data to investigate and analyze the financial status of the company. Since most IPO's are either new or 'transitioning growth' companies, there is generally some doubt as to the future value of the IPO.