What is considered an "initial public offering" (IPO)?

An initial public offering (IPO) is defined as the first time a company offers its shares to the public. This is a key event in the financial markets, as it marks the transition of a private company into a publicly traded one, allowing it to raise capital from public investors. During an IPO, a company typically offers a specified number of shares at a set price, which is established through an underwriting process that assesses the company's value and market conditions.

In contrast, the release of a company's annual financial report does not involve the offering of shares and is more about transparency and regulatory compliance. A secondary offering refers to the sale of shares that are already outstanding and held by existing shareholders, rather than the initial issuance of new shares by a company. Finally, issuing bonds for the first time pertains to debt securities, not equity shares, and thus is unrelated to the concept of an IPO. Therefore, the first-time offering of shares to the public is specifically what identifies an IPO in the context of the securities industry.