During which market activity are stocks first sold to the public?

The correct choice is the initial public offering (IPO), which is the process through which stocks are first sold to the public. An IPO is a significant event for a company because it allows them to raise capital from public investors by offering shares to the market for the first time. This step transforms a private company into a publicly traded one, giving it access to a wider pool of investors and enabling it to fund growth initiatives, pay down debt, or pursue other strategic goals.

Additionally, the IPO process involves regulatory scrutiny and compliance with legal requirements to ensure transparency and protect investors. Companies typically use underwriters to help facilitate the IPO, which includes determining the price of the shares and marketing them to potential investors.

In contrast, other activities such as a secondary offering involves the sale of additional shares after the IPO, a stock buyback refers to a company repurchasing its own shares from the marketplace, and a private placement is a sale of securities to a select group of investors, which does not involve the general public. Therefore, the initial public offering is distinctly characterized by its role as the first public sale of stocks.