What is an IPO?

Published On: Feb 02 2012 08:49:10 AM PST   Updated On: Jul 23 2015 10:09:59 AM PDT

As Ferrari prepares for an IPO, find out more about an initial public stock offering and what it means for a company.

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In the fixed price method, the price at which the securities are offered is fixed in advance. In the book building method, the investors have to bid for shares within a price band specified by the issuer and the final price is decided after observing the result of the bidding.

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