NPR.

When a company gets to a certain stage of life, when it's grown to a certain size, it comes

time to leave the warmth and safety of private investors to flee the coop and go public.

That means raising money by listing its stock on the stock market and initial public offering

at an IPO.

But here's a secret.

The initial public offering isn't public at all.

The investors are decided the night before the shares start trading.

And technically that is the IPO.

Dakin Campbell is the chief financial correspondent for Business Insider and he's the author of

the new book Going Public.

And Dakin explains that what happens is the night before the shares go on the stock market,

the investment banks in charge of the IPO will gather together big investors.

Also the people who run mutual funds or wealthy private investors.

Those people are the ones who will buy all the new shares, often with the intention of

selling them again the next morning to the public at large at an almost guaranteed profit.

This is the integrated from Planet Money, I'm Darren Woods.

Throughout the show they murky truth about how IPOs really work and how Spotify tried to change it.

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