An IPO or initial public offering is one of the many ways a company can sell its shares to the public or other agents. The private company, whose shares are to be sold to retail investors, institutional investors, or even both, uses an initial public offer. The stock market has the company's shares being exchanged. Thus, a public corporation is formed from a previously privately owned firm. This is also called going public, as the firm is then owned by the people, or shareholders, who have bought its shares.