IPO Glossary

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IPO Process Library · 10 IPO Glossary

Last Updated | November 11, 2026

IPO Glossary

Plain-English definitions of the terms that matter most in the IPO process, from allocation and book-building to lock-ups and Section 16.

Key Takeaways
  • Terms are grouped A to Z and tied to the Library pages that explain them in depth.
  • Definitions are general; thresholds and deadlines change, so confirm current rules for any filing.
  • Start with S-1, underwriter, book-building, greenshoe, and lock-up if you are new.
TermsRelated

A–Z definitions

#ABCDEFGILMOPQRSTUV

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10-K
Annual report with audited financial statements, business description, and risk factors.
10-Q
Quarterly report with unaudited financial statements and management's discussion.
8-K
Current report filed with the SEC to disclose material events, generally within four business days.

A

Allocation
The distribution of IPO shares among investors, decided by the underwriters and the company.
Anchor investor
A large investor that commits to buy a significant block of IPO shares, helping fill the book.

B

Book-building
The process of collecting investor orders to measure demand at different prices.
Bookrunner
An underwriter that manages the book and allocation; the lead bookrunner runs the deal.

C

Cap table
The record of who owns what in a company, including options, warrants, and convertibles.
Co-manager
A smaller-role underwriter in the syndicate.
Confidential submission
A draft registration statement submitted to the SEC for nonpublic review before public filing.
Cornerstone investor
An investor that agrees in advance to buy a defined amount in the IPO.

D

Dilution
The reduction in existing owners' percentage stake when new shares are issued.
Direct listing
Listing existing shares on an exchange without a traditional underwritten offering.
Directed share program
A portion of IPO shares reserved for employees, directors, or friends of the company.
Dual-class shares
A structure with share classes carrying different voting rights.

E

EDGAR
The SEC's electronic filing system.
Effectiveness
The point when the SEC declares a registration statement effective, allowing sales to proceed.
EGC (emerging growth company)
A company with limited revenue qualifying for scaled disclosure and other relief under the JOBS Act; the revenue threshold is adjusted periodically.

F

Firm commitment
Underwriting in which the banks buy all the shares and resell them, taking placement risk.
Float
The shares available to trade publicly, excluding restricted or insider-held shares.
Follow-on offering
An additional sale of shares by a company already public.
Free writing prospectus (FWP)
A permitted offering communication outside the statutory prospectus, subject to filing rules.

G

Greenshoe
An option letting underwriters sell up to 15% more shares than the base deal; also called over-allotment.
Gross spread
The underwriting discount: the gap between the public offer price and proceeds to the company.
Gun-jumping
Improper offering communications before or during the registration process.

I

Indication of interest
A non-binding investor expression of how many shares it wants at what price.
IPO pop
The percentage gain from the IPO price to the first-day trading price.

L

Lead left
The bank listed first on the prospectus cover, usually the lead bookrunner.
Lock-up
An agreement by insiders not to sell shares for a set period after the IPO.

M

Market cap
Share price multiplied by shares outstanding.
MD&A
Management's Discussion and Analysis of results, liquidity, and trends.

O

Opening auction
The exchange process that determines the first trade price for a newly listed stock.
Over-allotment
Selling more shares than the base offering to create a short position for stabilization.

P

PCAOB
The Public Company Accounting Oversight Board, which sets audit standards for public company audits.
PIPE
Private investment in public equity, often used alongside SPAC mergers.
Preliminary prospectus ('red herring')
The S-1 used during marketing, which includes a price range but not the final price.
Price range
The initial span within which the IPO is expected to price.
Primary shares
New shares sold by the company, raising cash for it.
Prospectus
The disclosure document delivered to investors in a registered offering.

Q

Quiet period
Time around the offering when communications and research are restricted.

R

Roadshow
Marketing presentations by management and underwriters to prospective investors.
Rule 144
SEC rule governing resale of restricted and control securities.

S

S-1
The registration statement for a U.S. IPO.
Secondary shares
Shares sold by existing shareholders, with proceeds going to them.
Section 16
Rules requiring insiders to report holdings and trades and restricting short-swing profits.
Selling group
Brokers that distribute shares under the syndicate's terms.
SOX (Sarbanes-Oxley)
Law setting internal control, certification, and audit requirements for public companies.
SPAC
A special purpose acquisition company that raises funds in an IPO to merge with a private company.
Stabilization
Underwriter activity supporting the stock price after the IPO within securities rules.
Syndicate
The group of underwriters that together offer the shares.

T

Ticker symbol
The short code identifying a listed stock.

U

Underwriter
An investment bank that manages and typically purchases and resells the offering.
Underwriting agreement
The contract between the company and underwriters, signed at pricing.
Use of proceeds
The S-1 section describing how the company intends to spend offering proceeds.

V

Valuation
An estimate of the company's equity value.

Methodology & Sources
Synthesizes SEC rules and guidance (Securities Act of 1933, Exchange Act of 1934, Regulation S-K), NYSE/Nasdaq listing standards, FINRA rules, and public S-1 filings. Cross-checked against primary documents. Rules, thresholds, and timelines change; confirm current requirements with counsel before acting. General education, not legal or investment advice.

Author: Erwin Castro

IPO Glossary IPO Glossary Reviewed by Erwin Castro on Wednesday, November 11, 2026 Rating: 5

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