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Fortune
Fortune
Mia Taylor

What to know about investing in IPOs

Photo illustration of a street sign with two arrows, one pointing backward that reads "private," and one pointing forward that reads "public." (Credit: Photo illustration by Fortune; Original photo by Getty Images)

There’s a great deal of jargon associated with the investing world, and one of the terms you may often hear is "initial public offering," or IPO for short. This term is used to describe a private company offering stocks to the general public for the first time.

But what does an IPO mean for you as an investor? Though this process may seem like an opportunity to buy shares of a new stock issuance and make a great deal of money, there are also risks, including losing much of your investment.

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