How IPOs Work

By: Ed Grabianowski

The New York Stock Exchange. Matteo Colombo / Getty Images

Sometimes, the business report on the nightly news can sound like it's being given in a foreign language. Ask someone on the street if they've checked the EDGAR data for the Google IPO, and you'll likely get a blank stare.

IPOs are a very important aspect of the U.S. (and world) economy, and they've been around since the late 18th century. In fact, every company with stocks


In this article, we'll find out what an IPO is, why companies have them, and how people and companies make money with them.