Initial public offerings offer public market investors the earliest chance to own a piece of a promising company. Capital-intensive fields like drug development have continued to witness a stream of IPOs -- some more successful than others.
Besides raising cash for company operations, a public listing provides an opportunity for early investors to sell some or all their shares. Keep in mind, these investors may have had a stake in the company for many years.
A typical feature of an IPO requires early investors and insiders to "lock-up" their stock, meaning they cannot sell, for at least 180 days. Following the expiration of the lock-up period, early investors may sell some of their stock, putting downward pressure on the stock price.