Why Go Public? (The IPO)
It's not just about status. It's about a massive pile of cash.
1. Raising Capital
The "Ask Mom & Dad" Phase
When a company is private, it's owned by founders and rich investors. If they need $1 Billion to build a factory, they have to beg banks or find billionaires. It's hard.
The "Ask Everyone" Phase
They enter the stock exchange (IPO). They sell shares to millions of regular people like you. They get the $1 Billion cash instantly, and you get a slice of ownership.
2. The Secondary Market
Does Apple get paid when you buy AAPL?
No.
Once the IPO is over, the company doesn't see a penny from daily trading. When you buy a share on Robinhood, you are buying it from another person (like Bob from Ohio) who wants to sell.
3. Dilution (The Pizza Problem)
Sometimes companies do need more money later. They create new shares out of thin air and sell them. This is called a "Secondary Offering". It's bad for you.
Before Offering
You own 1 slice (12.5%)
After Offering
You still own 1 slice, but it's only 6.25% now.