An IPO (Initial Public Offering), known in Spain as an OPV (Oferta Pública de Venta), is the process by which a private company issues or offers shares for sale to the general public, beginning to trade on a stock exchange.
Why a company goes public
Mainly to raise capital to finance its growth, to give liquidity to its founders and early investors (letting them sell part of their stake), and to gain visibility and prestige as a publicly traded company.
Risks for investors buying at the debut
The listing price is set by the company itself together with the underwriting banks, who have an incentive to maximize the capital raised, not necessarily to offer the best price to the new investor. High volatility in the first trading sessions is common, and not every IPO holds onto its listing price over the medium term.
OPV vs. OPS
An OPV sells existing shares (from current shareholders), while an OPS (Oferta Pública de Suscripción, a share offering) issues new shares, diluting existing shareholders but bringing fresh capital into the company. Many public listings combine both types.