What Is an IPO?

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An IPO, or initial public offering, is the process through which a private company sells shares to public investors for the first time. Once listed, anyone with a brokerage account can buy and sell the company's stock on exchanges like the NYSE or Nasdaq.

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Before an IPO, a company is privately held. Its shares belong to founders, employees, and early investors like venture capital firms. The public cannot buy in. An IPO changes that. It opens up ownership to institutional investors, retail traders, and anyone else participating in public markets.

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Companies go public for several core reasons: to raise capital for expansion, to give early investors and employees a way to cash out, to increase visibility and credibility, and to create publicly traded stock that can be used as currency for future acquisitions. Going public also comes with tradeoffs such as quarterly earnings reports, SEC disclosure requirements, and constant public scrutiny of financial performance.

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The largest IPO in history was Saudi Aramco in December 2019, which raised $25.6 billion, later increased to $29.4 billion through a greenshoe option, and valued the company at $1.7 trillion. The largest U.S.-listed IPO was Alibaba in September 2014, raising approximately $21.8 billion initially and about $25 billion after its greenshoe option was exercised, on the New York Stock Exchange.

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Visa's 2008 IPO raised $17.9 billion during the global financial crisis, and the stock has since climbed from that debut to a market cap exceeding $600 billion as of early 2026.

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How the IPO Process Works

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Going public isn't something that happens overnight. The process typically takes 6 to 12 months and involves multiple phases.

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1. Choosing underwriters. The company selects one or more investment banks to manage the IPO. These banks, called underwriters, advise on valuation, structure the offering, and sell shares to institutional investors. Major underwriters include Goldman Sachs, JPMorgan, and Morgan Stanley. The lead underwriter is called the bookrunner and takes the largest portion of the underwriting spread. In U.S. IPOs, total underwriting fees typically range from 3% to 7% of gross proceeds, depending on deal size and structure.

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2. SEC filing (S-1). The company files a registration statement known as an S-1 with the U.S. Securities and Exchange Commission. This document discloses the company's financials, business model, risk factors, management team, and how it plans to use the capital raised. Some companies file confidentially first, which keeps the details private until closer to the listing date. Kraken and Discord both used confidential filings ahead of their planned 2026 debuts.

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3. Roadshow. Before pricing, the company's executives and underwriters tour institutional investors such as pension funds, mutual funds, and hedge funds to pitch the stock and gauge demand. This is called the roadshow. Investor appetite during the roadshow directly influences the final offering price and can determine whether the IPO is priced at the top, middle, or bottom of its initial range.

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4. Pricing. Based on roadshow demand, the underwriters and company agree on a share price and the number of shares to be sold. Companies typically sell roughly 10% to 25% of their total equity in an IPO, though the percentage can vary by deal. The underwriting spread, which is the total fee investment banks take, is usually 3 to 7% of total proceeds and is split between the bookrunner, syndicate members, and selling brokers.

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5. First day of trading. Shares begin trading on the stock exchange. If the stock opens significantly above its IPO price, that is called a pop. It means there was more demand than anticipated. Big pops make great headlines, but they can also mean the company left money on the table by pricing too low. Bullish, a crypto exchange that went public in August 2025, saw an 89% first-day pop. eToro jumped 29%. Visa popped 28% in 2008 despite launching into the worst financial crisis in decades.

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6. Lock-up period. After the IPO, insiders such as founders, early investors, and employees are typically restricted from selling their shares for 90 to 180 days. This lock-up period prevents a flood of selling pressure that could tank the stock immediately after listing. Once it expires, insider selling often increases, which can temporarily pressure the price.

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IPO vs. Direct Listing vs. SPAC

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An IPO isn't the only way to go public. Two alternatives have gained traction in recent years.

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Direct listing. In a direct listing, no new shares are created and no capital is raised by the company. Instead, existing shareholders such as employees, founders, and early investors sell their shares directly to the public on the exchange. There are no underwriters setting the price. The market determines it through a display-only period on the first trading day. Direct listings are cheaper because there are no underwriting fees, faster, and avoid share dilution. However, the company does not receive fresh capital. Spotify pioneered the modern direct listing in 2018. Slack followed in 2019. Coinbase used a direct listing in April 2021, opening at $381 per share for a fully diluted valuation of $85.8 billion. It was the first major crypto company to trade publicly in the United States.

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SPAC (Special Purpose Acquisition Company). A SPAC is a blank-check shell company that goes public first with no actual operations, raises cash from investors, and then merges with a private company to take it public. SPACs offer a faster path to public markets and let the target company negotiate its valuation upfront rather than leaving it to market forces on day one. They were extremely popular in 2020 and 2021 but fell out of favor after many merged companies underperformed badly. Still, more than 130 SPAC IPOs were completed in 2025, a significant increase from 2023 and 2024, signaling a moderate comeback as the IPO market reheated.

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Why Crypto Companies Are Going Public

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The crypto industry has entered a new phase of institutional maturity, and IPOs are a centerpiece of that evolution.

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Coinbase's April 2021 direct listing set the template. Shares opened at $381, quickly hit $429, and settled at $328, giving the exchange a market cap of $62 to $85.8 billion depending on share count methodology. The listing validated that a crypto-native business could meet the same disclosure and compliance standards as any publicly traded company. It also gave Coinbase an acquisition currency that it later used to buy derivatives exchange Deribit for $2.9 billion in 2025, the largest M&A deal in crypto history.

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Since Coinbase, the pipeline has steadily built. In 2025, Circle, issuer of the USDC stablecoin, listed on the NYSE. Bullish, backed by Peter Thiel, debuted in August 2025 with that 89% first-day pop. eToro went public in May 2025. Gemini, founded by the Winklevoss twins, listed on the Nasdaq in September. Figure, a blockchain-based lending company, completed its Nasdaq IPO that same month.

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The 2026 pipeline is even deeper. Kraken confidentially filed its S-1 in late 2025, targeting a first-half 2026 listing at a $20 billion valuation. Its November 2025 pre-IPO round raised $800 million from Citadel Securities, Jane Street, and other institutional heavyweights. Consensys, parent of MetaMask and Infura, is reportedly preparing a mid-2026 IPO with JPMorgan and Goldman Sachs. BitGo, Ledger, and Animoca Brands are all in various stages of listing preparation. PitchBook's VC Exit Predictor gives Ripple a 96% probability of an eventual IPO, though the company says it has no immediate plans.

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Several forces are converging to make this possible. The Trump administration's SEC has adopted a more constructive posture toward digital asset regulation. The GENIUS Act of 2025 clarified stablecoin rules. Europe's MiCA framework created standardized requirements for crypto businesses. And after years of post-FTX caution, institutional investors are increasingly comfortable with crypto companies that can demonstrate profitability and regulatory compliance, not just user growth.

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That shift in what investors value matters. In 2021, crypto company valuations were driven by hype and user numbers. In 2025 and 2026, the market is rewarding fundamentals. Kraken reported $421 million in adjusted EBITDA for 2024. Circle generates yield on over $30 billion in USDC reserves.

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What Happens After a Company Goes Public?

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Going public fundamentally changes how a company operates. Publicly traded companies must file quarterly Form 10-Q and annual Form 10-K financial reports with the SEC, hold quarterly earnings calls, and maintain investor relations teams. Executive compensation, insider transactions, and material business developments all become public information.

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The benefits are substantial: deep capital market access, the ability to use publicly traded stock for acquisitions and employee compensation, and increased credibility with partners, regulators, and customers.

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The downsides are real too. Public companies face relentless pressure to deliver quarterly results, which can conflict with long-term strategy. Crypto companies face an additional layer of volatility because their stock prices tend to correlate with the underlying crypto market. After Bitcoin peaked near $126,000 in October 2025 and dropped to the $60,000 to $70,000 range by early 2026, every publicly traded crypto stock absorbed the impact. Circle fell 11% from its listing price, eToro dropped 58%, Bullish lost over 52%, and Gemini cratered nearly 80%.

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This does not mean the IPOs were failures, but it illustrates a fundamental reality of crypto equities: they inherit the cyclicality of the assets they serve. Investors evaluating crypto stocks need to think about both the company's fundamentals and the broader crypto cycle.

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Key IPO Terms You Should Know

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S-1 filing: The registration document a company files with the SEC before going public. Contains financials, risk factors, and business details.

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Underwriter: The investment bank or banks managing the IPO, setting the price, selling shares to investors, and earning a percentage of proceeds.

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Bookrunner: The lead underwriter responsible for managing the order book and coordinating the pricing process.

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Roadshow: The pre-IPO marketing tour where executives pitch institutional investors to build demand.

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Lock-up period: A 90–180 day window after listing during which insiders can't sell shares.

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First-day pop: When a stock opens well above its IPO price on the first trading day. Signals strong demand but may mean the company underpriced its shares.

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Greenshoe option: An over-allotment clause letting underwriters sell up to 15% more shares than originally planned if demand warrants it. Saudi Aramco exercised its greenshoe to increase the IPO raise from $25.6 billion to $29.4 billion.

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Fully diluted valuation: The company's total value accounting for all outstanding shares plus options, warrants, and convertible securities that could become shares in the future.

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Confidential filing: Submitting the S-1 to the SEC privately. The public doesn't see financials until closer to the listing date. Commonly used by companies that want to test regulatory waters before committing.

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Free float: The portion of a company's shares available for public trading, excluding insider-held and locked-up shares. Stock exchanges set minimum free float requirements for listed companies.

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The Bottom Line

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An IPO is one of the most significant events in a company's lifecycle. It transforms a private operation into a publicly traded entity with all the capital access, scrutiny, and accountability that entails.

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For crypto, the current wave of IPOs represents an industry-wide turning point. Companies that spent years operating outside of traditional finance are now filing S-1s, hiring Wall Street underwriters, and subjecting themselves to the same disclosure standards as any Fortune 500 company. That is not just a financial milestone, it is a credibility milestone.

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Whether you are evaluating a crypto company's stock or simply trying to understand what going public actually means, the core mechanics are straightforward. The company sells ownership. The public buys in. And from that point forward, the market decides what it is worth every single trading day.

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