How I.P.O.s & the stock market work.

• Position: Initial public offering - Brief article

* A private company decides to raise money by selling shares to the public for the first time in what's known as an initial public offering (commonly known as "going public").

* The company then hires an investment banker--a company like Merrill Lynch or Morgan Stanley--to figure out what it's worth, hew many shares should be offered, and at what initial price.

* Once the company goes public, the shares are traded on a stock exchange--like the New York Stock Exchange or the Nasdaq. The share price is determined by supply and demand. The more...