Flotation / IPO

A flotation is the process of launching a company on to the stock market for the first time by inviting the general public and investment institutions to subscribe for shares – effectively selling them part of the company. Flotations are also referred to as Initial Public Offerings (IPOs).

IPOs generally involve young companies which are trying to raise capital to expand or to realise returns on their founders investments, but established firms do occasionally go public too – in 2000, for example, Goldman Sachs went public and made millionaires of many of its partners.

Some firms, however, are loath to float as it does mean giving up control and having to share potentially sensitive information on past and future earnings with the market. Richard Branson, for example, disliked the “onerous obligations” of being a public company and took Virgin private again only a year after floating it.

• See Tim Bennett’s video tutorial: A lesson from Facebook – avoid IPOs.

MoneyWeek magazine

Latest issue:

Magazine cover
What George didn't tell you

The hidden flaws in Britain's economy

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues

Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.


30 March 1867: Russia sells Alaska to the United States of America

With the American Civil War out of the way, US Secretary of State William Seward agreed on a deal to buy Alaska from Russia, on this day in 1867.