One person closely watching LinkedIn's IPO was Barry McCarthy.ĬAMPBELL: Barry being sort of, you know, the no-nonsense financial markets expert just saw that as so inefficient. Its share price more than doubled on the first day, hundreds of millions of dollars the company missed out on. But the amount that share prices sometimes rise on the first day of an IPO goes way beyond that. Now, a little bit of a pop, like a slight rise in the share price on the day of the launch is widely seen as a good thing. So the people who run mutual funds or wealthy private investors, those people are the ones who will buy all the new shares, often with the intention of selling them again the next morning to the public at large at an almost guaranteed profit. WOODS: The investment banks in charge of the IPO will gather together big investors. Our colleague Darian Woods from The Indicator from Planet Money explains.ĭARIAN WOODS, BYLINE: Dakin Campbell is the chief financial correspondent for Business Insider and he's the author of the new book 'Going Public.'ĭAKIN CAMPBELL: Investors are decided the night before the shares start trading.

But contrary to what the name implies, most IPOs are not actually public. For many growing companies, there is a rite of passage, the initial public offering, or IPO.

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